HDFC Q3 net profit grows 15% to Rs 7,078 crore

Largest pure-play mortgage lender HDFC reported a 14.74 per cent rise in its December quarter consolidated net profit at Rs 7,077.91 crore, with growth being restricted by rate hikes.

On a standalone basis, the city-based company, which is merging with its subsidiary HDFC Bank, had a profit after tax of Rs 3,690.80 crore as against Rs 3,260.69 crore in the year-ago period.

The company's core net interest income grew 13 per cent to Rs 4,840 crore for the reporting quarter, on the back of the net interest margin to 3.5 per cent and a 13 per cent growth in the overall loan book on assets under management basis.

Its Vice Chairman and Chief Executive Officer Keki Mistry said the profit growth has been restricted due to rate hikes by the Reserve Bank, explaining that while the company's liabilities get repriced faster, it takes a while for the assets to reflect the newer rates.

He said the transmission lag between the asset and liability repricing is generally one quarter, and the company will start reporting better growth numbers thereafter.

Mistry said he feels the RBI is through with a bulk of its rate actions and may only do another 0.25 per cent hike, and added that the demand for housing remains robust.

A bulk of the loan book growth came from the individual loans segment, where there was a 26 per cent growth, he said, adding that the average ticket sizes have also gone higher at Rs 35.7 lakh per loan.

Over 52 per cent of the borrowers of the lender have an annual income of over Rs 18 lakh, he said on an analyst call.

From an asset quality perspective, the lender reported an improvement in the gross non-performing assets ratio to 1.49 per cent as against 2.32 per cent in the year-ago period.

Mistry said the restructured loans have also declined to 0.7 per cent of the book from a peak of 1.4 per cent.

It set aside Rs 370 crore as loan impairment charges for expected credit losses, which was down from Rs 393 crore a year ago and Rs 473 crore in the preceding September quarter.

The overall capital adequacy as of December 31, 2022, stood at 23.7 per cent with the core tier-I at 23.2 per cent.

He said the company is yet to receive any communication from the Reserve Bank on its application for multiple regulatory leeways to continue after the merger.

The National Company Law Tribunal is expected to come out with an order on the proposed merger, he added.

The scrip of the lender closed 1.85 per cent down at Rs 2,612.80 apiece on the BSE on Thursday.