Share price of India?s leading home financier Housing Development Finance Corporation (HDFC) tanked by 4.43% on Wednesday even as the company announced a 21% strong earnings growth for the first quarter of 2009-10. The net profit rose by around 21% to Rs 565 crore compared to Rs 468 crore during the corresponding period of the previous fiscal. However, this remained lower than analysts? estimates, reckon market experts.
HDFC has lowered its floating lending rates for new loans by 25-50 basis points effective from Wednesday. Loans up to Rs 15 lakh are offered at 0.50% cheaper rate at 8.75% to new customers, while those between Rs 15 lakh and Rs 30 lakh are being offered at 0.25% cheaper rate at 9%. Loans above Rs 30 lakh are now offered by HDFC at 0.25% cheaper rate at 9.5% to new customers. As HDFC?s current prime lending rate remains unaltered at 13.75%, its existing borrowers would not be benefited due to the recent alteration in floating rates.
HDFC?s total income rose by around 23% to Rs 2,849 crore as against Rs 2,319 crore earned during the year-ago period. In the first quarter of the current fiscal, HDFC made profits worth Rs 51 crore on sale of investments.
Speaking at the annual general meeting, chairamn Deepak Parekh said: ?The demand for individual home loans continued despite the overall economic slowdown and uncertainty. The average size of individual loans has increased and stood at Rs15.40 lakh.?
The loan approvals during the period ended June 30, 2009, aggregated to Rs 12,259 crore as compared to Rs 9,996 crore during the corresponding period of the previous year?representing an increase of 23%. Loan disbursements during first quarter of the current fiscal amounted to Rs 8,688 crore as compared to Rs 7,204 crore during the corresponding period in the previous year ? representing an increase of 21%.
?On a sequential quarter basis, the growth in individual loan approvals and disbursements for the first quarter of this financial year has been 45% and 19%, respectively, as compared to the quarter ending March 31, 2009,? Parekh said.
The lowering of rates has not taken its toll on the earnings.
?The cost to income ratio stood at 8.8% for the year ended March 31, 2009, as against 9.2% in the previous year and continues to be amongst the lowest in the financial sector in Asia,? Parekh said.
A dire need was there to establish a ?real estate regulator? in the country. However, our government was not responding to this grave issue. Also, reverse mortgage product was not picking up in India, mainly due to certain taxation issues. Unfortunately, the government did not address this issue too in the last Budget, Parekh said.
HDFC vice-chairman Keki Mistry said HDFC had got no plans to drop its PLR in the near future and the company would go for the proposed QIP of Rs 4,000 crore very soon. He said the interest rates are not likely to shoot up drastically in the immediate future.
