HDFC profit up 11% at Rs 2,419 crore on commercial loan growth

MUMBAI: Top mortgage lender HDFC Ltd on Wednesday reported an 11 per cent rise in consolidated net profit at Rs 2,419 crore for the December quarter, driven by an uptick in commercial lending and better performance by subsidiaries.

HDFC vice-chairman and chief executive Keki M Mistry attributed the lower rise in net to "lower profit on sale of investments at Rs 57 crore against Rs 113 crore, lower income from leased properties, other income and higher depreciation compared to the previous year."

"Lower net growth is due to lower non-core income — profit on sale of investments was Rs 57 crore, down from Rs 113 crore a year ago — and income from leased properties was Rs 1 crore, down from Rs 17 crore."

Had it not been for the traction in commercial loan book, which after de-growing in the first two quarters rose by net addition of Rs 1,987 crore, the numbers would have been even lower, he said.

During the quarter, retail loan book, which has been growing at a steady pace all through, gained further traction in the October-December period clipping at 23 per cent.

Mistry said had it not been for the sale of loans, primarily to its banking arm HDFC Bank and near halving of income from sale of investments, which came down to just Rs 57 crore as against Rs 113 crore a year ago, the net income would have been higher at 15 per cent.

The largest mortgage lender sold Rs 12,975 crore loans in 12 months to December, while the unrealised gains on HDFC's listed investments amounted to Rs 59,091 crore, as against Rs 51,996 crore.

Growth in the non-individual loan portfolio has picked up, recording a net rise of Rs 1,987 crore for the quarter under review. Accordingly, the lender made higher provisioning, mainly on account of standard assets at Rs 68 crore, up from Rs 45 crore, Mistry said.

Also, he said owing to lower interest rate, it earned lower interest on shareholders funds worth Rs 27,000 crore, impacting profitability. If adjusted for these factors, profit growth for the quarter would have been around 15 per cent.

On a standalone basis, HDFC net rose 6.7 per cent to Rs 1,520.51 crore during the December quarter from Rs 1,425.49 crore a year ago.

Including deferred tax provisions and excess overall provisions, the net income on a standalone basis would have been 13 per cent, Mistry said, adding the standalone income rose to Rs 7,327.69 crore for the quarter from Rs 6,882.52 crore.