Housing finance major HDFC on Monday reported a 16 per cent growth in standalone net profit to Rs 3,700 crore for the January-March quarter, helped by record loan sales on the back of benign interest rates and the resultant fall in cost of funds along with the near-total repayments that culled provisions and credit costs.
For the full year, the company, which is working on a reverse merger with its banking subsidiary, has booked a net profit of Rs 13,742 crore, up from Rs 12,027 crore in FY21, vice-chairman and chief executive Keki Mistry said on Monday in an earnings call with analysts.
On a consolidated basis, net profit for the quarter surged 21.6 per cent to Rs 6,892 crore on-year and for the full year it jumped 21 per cent to Rs 22,595 crore, Mistry said and guided towards better days.
The demand momentum seen in the quarter is likely to continue into FY23, Mistry said and specifically noted that the lender has had a historic loan sale in March at Rs 24,967 crore -- 94 per cent of the total quarterly sales in the month alone.
He specially mentioned the turnaround in the commercial reality book, which since the pandemic has been shrinking and in the December quarter it was a minus 1 per cent.
But the March quarter saw the disbursal jumping 7 per cent, Mistry added.
Demand for home loans and the loan pipeline (91 per cent came digitally applied in Q4) continues to remain strong led by both affordable and high-end home loans on the back of increasing sales momentum and new project launches, he said.
On the reverse merger with HDFC Bank, Mistry said they are working with the regulators which when materialised, will lead to 10 percentage points more FPI holding in the merged entity as under the merger scheme the 21 per cent that HDFC owns in the bank now will get extinguished and the entity will be a fully publicly owned with no promoters.
Total standalone income in the quarter rose to Rs 12,308.46 crore from Rs 11,707.53 crore, but consolidated income fell to Rs 35,060 crore from Rs 35,754 crore a year ago and Mistry attributed the same to nominal gains from sale investments/assets during the year.
Mistry said higher loan sales were driven by retail loans where disbursements grew 38 per cent.
The final month of the quarter alone saw the Corporation recording its highest monthly individual disbursements ever at Rs 24,967 crore despite the cessation of concessional stamp duty benefits in certain states.
Mistry said the Corporation has seen credit cost falling by 33 bps from 56 bps helping it maintain the spreads stable at 2.29 per cent and the resultant net interest margin improvement to 3.5 per cent.
He said 29 per cent of all home loan volume and 13 per cent in value were affordable.
This helped it continue to have the largest number of home loan customers of over 3.14 lakh who have availed of the benefits under the credit-linked subsidy scheme.
As of end-March, cumulative loans disbursed under this head stood at Rs 52,144 crore and the cumulative subsidy at Rs 7,228 crore.
All this had the total loan book or assets under management jumping to Rs 653,902 crore from Rs 569,894 crore in FY21, he said.
The collection efficiency in individual loans crossed 99 per cent in the quarter, leading to a fall in overall individual non-performing loans to 0.99 per cent from 1.44 in Q3, and the same for non-individual loans to 4.76 per cent from 5.04 in December 2021.
In absolute terms, gross bad loans stood at Rs 10,741 crore or 1.91 per cent of the overall portfolio, down from 2.32 per cent in Q3.
It led to the overall provision falling to Rs 13,506 crore and the expected credit loss to Rs 1,932 crore from Rs 2,948 crore.
Credit costs for the year stood at 33 basis points down from 56 bps in FY21.
The net interest income rose 14 per cent to Rs 17,119 crore from Rs 14,970 crore in the previous year fetching an NII of Rs 4,601 crore for Q4, up 14 per cent on-year, as spread on individual loan book stood at 1.93 per cent and on the non-individual book at 3.40 per cent, and the overall to 2.29 per cent for the fiscal on a NIM of 3.5 per cent.
The Corporation has excess liquidity of Rs 46,000 crore, which is down from Rs 55,000 crore in Q3 and also carries Rs 25000 crore of excess PSL loans and has and holds Rs 40,000 crore in government securities.