Housing Development Finance Corp (HDFC), India’s leading home loan company, has posted a 10 per cent jump in its net profit for the September quarter at Rs 1,266.33 crore against Rs 1,151.12 crore in the same quarter of last year.
The spread on loans over the cost of borrowings for the half year ended September stood at 2.24 per cent while the net interest margin was 4.1 per cent. Gross non-performing loans amounted to Rs 1,473 crore, which is equivalent to 0.79 per cent of the loan portfolio as against 0.77 per cent last year. The growth was slower because of the dividend from its associate HDFC Bank coming in the first quarter itself, unlike the usual second quarter, its vice chairman and CEO Keki Mistry said.
Mistry said a major chunk of the increase in bad assets is attributable to a single account, the Rs 460 crore exposure to realty company Hirco’s two projects near Mumbai and Chennai which has gone bad.
He said it’s a “technical default” and there is adequate security against the exposure while the cost of the land parcel alone is over Rs 2,000 crore.
HDFC will enforce provisions of the Sarfesi Act and auction the securities, he said, hinting that realty firm Hiranandani Constructions is likely to take over the project.
Rikesh Parikh, VP, Institution Corporate Broking, Motilal Oswal Securities, said, “HDFC’s PAT was marginally ahead of estimate led by higher other income of Rs 86 crore due to profit on sale of investment. On operational front, income from operation of Rs 5,860 crore was in line with estimate. However, lower operating expense of Rs 187 crore (3 per cent down Q-o-Q) and lower provision of Rs 15 crore led to higher PAT.”
HDFC shares closed 0.23 per cent higher at Rs 820.45 on the BSE on Monday,
As on September 30, 2013, the loan book stood at Rs 1,84,886 crore as against Rs 1,55,128 crore on September 30, 2012. Loans sold during the preceding 12 months amounted to Rs 3,792 crore. The growth in individual loan book, after adding back loans sold is 29 per cent (26