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HDFC thrives on volume growth

Mumbai, May 6: Mortgage major Housing Development Finance Corporation Ltd (HDFC) today met Street estimates by posting an 11 per cent rise in net profit for the fourth quarter ended March.

Net profit of the country’s largest housing finance company stood at Rs 1,723.10 crore against Rs 1,555.21 crore in the same period of the previous fiscal.

“It’s the volume-driven growth that we have seen in the course of the year and that is what has contributed to our profitability,” vice-chairman and chief executive officer Keki Mistry said today.

Income from operations during the quarter rose to Rs 6,492.72 crore from Rs 5,561.20 crore in the fourth quarter of the preceding year. Profit on sale of investments was higher at Rs 127.61 crore (Rs 104.88 crore).

For the full year, HDFC’s standalone profit rose 12 per cent to Rs 5,440.24 crore, while profit before dividend, sale of investments and tax stood at Rs 6,635.67 crore, reflecting a growth of 15 per cent.

The mortgage lender’s standalone net interest margin for the year stood at 4.1 per cent, up from 4 per cent in the December quarter, and the spread on loans stood at 2.29 per cent.

As on March 31, 2013, HDFC’s loan book stood at Rs 1,97,100 crore against Rs 1,70,046 crore in the previous year. The lender said the individual loan book grew 26 per cent, after adding back loans sold.

However, lending to the non-individual segment rose just 9 per cent because of the economic slowdown and heightened perception of risks.

“My belief is that once we have a stable government after the elections, the investment cycle will start picking up. Once the investment cycle restarts, demand for commercial real estate will increase,” Mistry said.

Of the total loan book, individual loans comprised 71 per cent. Further, 85 per cent of the incremental growth in the loan book during the year came from individual loans.

Asset quality of the lender was also stable during the year. Gross non-performing loans as of March 2014 stood at Rs 1,357 crore. According to the corporation, this was equivalent to 0.69 per cent of the portfolio and lower than 0.77 per cent as on December 31, 2013.

Non-performing loans of the individual loan portfolio stood at 0.53 per cent, while that of the non-individual portfolio stood at 1.01 per cent.

The board of directors today recommended a dividend of Rs 14 per share, higher than Rs 12.50 per share for the previous year.

 
 
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