HDFC's consolidated profit up 37.5 percent sequentially

India’s largest home financier Housing Development Finance Corporation (HDFC) reported net profit of Rs 4,953 crore on a consolidated basis in the first quarter of financial year 2021-22 (Q1-FY2022).

It was 37.5 percent more than the previous quarter, but 15.8 percent lower than a year ago.

On a consolidated basis, HDFC clocked revenue of Rs 30,991 crore in Q1-FY2022. This was 3.5 percent higher than the consolidated revenue a year ago, but fell 13.3 percent sequentially.

HDFC's standalone net profit of Rs 3,001 crore in Q1-FY2022 dropped 5.6 percent sequentially, and was 1.7 percent lower than the net profit in June last year.

HDFC's standalone income of Rs 11,657 crore fell 10.5 percent compared with Rs 13,018 crore a year ago. However, in June 2020, HDFC had reported a gain of Rs 1,241 crore from the sale of an investment, which was reported at Rs 263 crore in the latest quarter. The revenue in the June quarter was 0.3 percent lower on a sequential basis.

Its segment revenue from the life insurance business of Rs 15,299 crore rose 5.2 percent over the same quarter last year, but declined 19.1 percent from Rs 18,913 crore in the March 2021 quarter.

“The demand for home loans continues to remain strong and disbursements have picked up with the unlocking of respective locations," said HDFC in exchange filings.

"While disbursements during April and May of the current financial year were somewhat impacted, business has reverted to normalised trends in the months of June and July,” according to the company.

The June 2021 quarter saw 88 percent of new loan applications originating through digital channels, according to HDFC.

The company highlighted that a significant part of the June quarters had entailed localised lockdowns and restrictions. “The second wave, however, was less disruptive compared to the corresponding quarter of the previous year where there was a national lockdown,” HDFC added. “In addition, now there is a significant increase in the usage of digital platforms to conduct business.”

On the non-performing assets (NPA) front, HDFC said its gross NPAs for the June 2021 quarter stood at Rs 11,120 crore, which accounted for 2.24 percent of its loan portfolio.

Individual NPAs increased due to slippages on account of the impact of the second wave of the pandemic, HDFC said. “Collection efforts were hindered due to the recovery teams being unable to do field visits during the lockdown period,” it added.

Going forward, HDFC pointed out that the key risks to business remain a third wave and variants of the virus.