Housing finance company DHFL reported a net profit of Rs 180.3 crore for July-September, an increase of 18.51% year-on-year on the back of strong loan growth and healthy margins.
The company’s operating income was Rs 1,811 crore for the quarter, a growth of 25% y-o-y as loan disbursals grew by 18% to Rs 5,014 crore for July-September.
Loan sanctions also showed a healthy growth of 25% to Rs 7,668 crore for the period. DHFL is targeting loan growth 20% for the current fiscal. “There is significant effort put in by the government to boost the housing market like ‘housing for all’ and the smart city concept. There is room for everyone to grow even as the overall housing market expands,” said Kapil Wadhawan, chairman and managing director.
Net interest margin widened to 2.89% for July-September from 2.75% from the previous quarter and DHFL is targeting a margin of around3% for 2015-16.
Wadhawan said the cost of borrowing for the company has reduced mainly due to a rating upgrade for the firm.
“Last year, we were moved to AAA from AA+ rating and that has resulted in our cost of funds moving down over time and is right now 9.9%,” he said.
The home loan lender’s borrowings are largely bank loans (56% of the total borrowings) but it is also a deposit-taking NBFC. Deposits form 7.81% of total borrowings, according to Wadhawan. The company also borrows through bonds and money market instruments where interest rates have been falling over the last one year on the back of policy rate cuts by the Reserve Bank of India. A fall in the cost of borrowing had prompted
the company to cut its retail lending rate by 20 basis points earlier this month.