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HDFC reports an 18% year-over-year increase in net profit in the second quarter to ₹4,454 crore

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  • Housing Development Finance Corporation (HDFC) today reported a 12.9% growth in net interest income in the second quarter to ₹4,639 crore.
  • The home finance company reported 17.8% year-over-year growth in stand-alone net income, aided by 24% growth in interest income.
  • In a clarification prior to the merger with HDFC Bank, Keki Mistry, vice chairman and CEO of HDFC, said that most of the loans on the company’s books are loans that may be underwritten by banks.

Housing Development Finance Corporation (HDFC) today reported 17.8% year-over-year growth in second quarter stand-alone net profit to ₹ 4,454 crore. Profitability was aided by a 24.2% growth in interest income, which stood at ₹13,143 crore in the September quarter.

The housing finance company reported a 12.9% growth in its net interest income to 4,639 crore, up from ₹4,110 crore a year ago.

HDFC also reported a healthy improvement in asset quality. Total gross NPLs as of September 30 were ₹9,355 crore, equivalent to 1.59% of the portfolio, up from 2% in the same period last year.

Gross individual non-performing loans (NPLs) amounted to 0.91%, while gross non-performing non-performing loans amounted to 3.99%.

‘Loans we make are loans that banks make’

Keki Mistry, vice chairman and CEO of HDFC, said the company is providing only those loans that would normally be provided by banks, with the exception of acquisition financing and equity loans to companies.

“Loans we make are loans that banks make. We don’t do anything that banks don’t, with a few exceptions,” he said.

Mistry said that in reality a significant portion of HDFC’s loans would be transferred by the merged entity. In April of this year, a merger of HDFC and HDFC Bank was announced.

Merger progress – all regulatory approvals received, says Mistry

Mistry explained that the company had received approvals for the merger from regulatory authorities, including the Reserve Bank of India (RBI), market regulator Securities and Exchange Board of India (SEBI) and the Competition Commission of India.

The merger of the two entities is now pending shareholder approval. The National Company Law Tribunal (NCLT) has approved the shareholders’ meeting to be held on November 25 this year.

Earlier in October, Srinivasan Vaidyanathan, Chief Financial Officer of HDFC Bank, said that the total process can take up to 8 months after shareholder approval.

HDFC’s Q2 FY23 in numbers:

Particularities Q2 FY23 Q1 FY23 Q2 FY22
Revenue from operations ₹15,027 crore ₹13,240 crores ₹12,216 crore
Net profit ₹4.454 crores ₹3,669 crore ₹3.781 crore
Net interest income ₹4,639 crore ₹4,447 crore ₹4.110 crore
Net interest margin 3.4% 3.4% 3.6%
AUM ₹6,90,284 crore ₹6.71.364 crore ₹5,97,339 crore

Source: Company Reports

Home loan demand strong, new payouts through digital channels rise to 92%

HDFC reported that home loan demand remained strong in two segments – middle-income and high-end. According to the company, individual payouts rose 36% in the September quarter. Mistry said he expected housing demand to persist into the future.

HDFC also reported that new loan disbursements through digital channels rose to 92% during the half-year ended September 30, 2022.

The average loan size also increased 7.9% during the half to ₹35.7 lakh from ₹33.1 lakh a year ago. Individual loans as a percentage of total assets under management (AUM) also rose to 81% in H1 FY23, from 78% a year ago.

“The growth is broad-based, it is happening from all parts of the country. Metros like Mumbai and Delhi have not contributed much in the past two years. Over the past two years, growth in these metros has been much faster,” Mistry explained during the earnings call, adding that the faster growth in metro cities has increased the share of Tier-2 and Tier-3 destinations in credit growth. increased, down.


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