HDFC net soars 17% in Q4 on strong loan demand

Housing Development Finance Corporation (HDFC) posted a 17 per cent increase in fourth-quarter standalone net profit aided by strong demand for home loans from individual customers.

In the January to March period, India’s largest private home loan provider posted a net profit of Rs 1,555 crore against Rs 1,326 crore, a year ago. Income from operations increased 16 per cent to Rs 5,561 crore.

About 81 per cent of the incremental growth in the loan book during the year came from individual loans, the company said. “Most of the loan growth came from tier-II and tier-III cities and the periphery of metro cities,” Keki Mistry, Vice-Chairman and CEO, said.

For the financial year ended March 31, 2013, HDFC’s net profit grew 18 per cent to Rs 4,848 crore on total income of Rs 21,113 crore.

In FY13, the loan book grew 21 per cent to Rs 1,70,046 crore against Rs 1,40,875 crore in the previous year.

The average size of individual loans at HDFC was Rs 21.6 lakh in FY2012-13 compared with Rs 19.5 lakh in the previous year.

Individual loan approvals and disbursements grew by 29 per cent and 33 per cent respectively during the year, the company said.

The board has recommended a dividend of Rs 12.50 per share.

On interest rates coming down, Mistry said it can happen only if the housing finance company’s borrowing cost comes down.

He said that banks have been unable to pass on repo rate cut benefits because they have not been able to bring the deposit rates down.

Liquidity crunch

“There is still liquidity crunch in the system. So banks are unable to cut deposit rates. The moment banks cut lending rates while lending to us, we can pass this on to customers,” Mistry said.

Shares of the Mumbai-based company closed at Rs 885.60, up 3.85 per cent, on the Bombay Stock Exchange on Wednesday.

satyanarayan.iyer@thehindu.co.in

Source: thehindubusinessline