PremiumNBFC-giant HDFC garnered a net profit of ₹4,454. 24 crore for the quarter ending September 30, 2022 (Q2FY23), rising by 17.8% from ₹3,780.50 crore in the same period a year ago. Q2 PAT climbed by at least 21.4% as against ₹3,668.82 crore in Q1FY23. Overall, HDFC beats street's expectations in the second quarter of FY23.
However, according to HDFC's financial audit report, the PAT in Q2FY23 stood around ₹5,414 crore compared to ₹ 4,671 crore in the corresponding quarter of the previous year. But after providing a tax of ₹960 crore, the reported PAT came in around ₹4,454 crore in Q2FY23.
Meanwhile, the NBFC's net interest income (NII) came in at ₹4,639 crore up by 12.9% from ₹4,108.5 crore in Q2 of FY22.
HDFC said the monetary policy and interest rate actions have had a short-term impact on the net interest income (NII) and to a lesser extent on the net interest margin (NIM).
Gaurav Jani – Research Analyst, Prabhudas Lilladher said, "NII was 2.8% higher to estimates at Rs46.4 billion (+30% YoY) mainly led by better NIM at 3.3% (PLe 3.2%) while AuM growth was a tad lower. Overall AuM growth was 14.5% (PLe 15.2%); net individual loans saw a ~17% growth YoY (share was 81%). Opex was flat QoQ at Rs5.9bn (PLe Rs5.35 billion) due to higher other opex."
Further, in the first half of FY23, individual approvals and disbursements grew by 35% and 36% respectively compared to the corresponding period in the previous year. HDFC continued to witness strong demand for home loans.
It said, "The demand for home loans continues to remain strong. Growth in home loans was seen in both, the mid-income segment as well as high-end properties."
In the half-year that ended September 30, 2022, 92% of new loan applications were received through digital channels. Further, the average size of individual loans stood at ₹35.7 lakh compared to ₹33.1 lakh in FY22. Also, the collection efficiency for individual loans on a cumulative basis stood at over 99% during the quarter that ended September 30, 2022.
As of September 30, 2022, HDFC's assets under management (AUM) came in at ₹6,90,284 crore as against ₹ 5,97,339 crore in the previous year. In this period, individual loans comprise 81% of the Assets Under Management (AUM).
In terms of AUM, HDFC highlighted that individual loans comprise 81% of the Assets Under Management (AUM).
On asset quality, Jani added, "Asset quality (GNPL) improved QoQ from 1.78% to 1.59% (PLe 1.67%). Provisions were a bit lower at Rs4.73 billion (PLe rs50 billion) while provision cover is Rs131.5bn (2.2% EAD). Total restructuring stood at Rs42.44 billion or 0.7% of AuM."
Meanwhile, as of September 30, 2022, HDFC's gross individual non-performing loans (NPLs) stood at 0.91% of the individual portfolio, while the gross non-performing non-individual loans stood at 3.99% of the non-individual portfolio. The gross NPLs in the period ending September 2022 stood at ₹ 9,355 crore. This is equivalent to 1.59% of the portfolio.
HDFC reiterated that the Corporation has not opted for the deferment, but declared its NPLs and made provisioning based on November 12, 2021, notification of RBI.
In the second quarter, HDFC assigned loans amounting to ₹ 9,145 crore to HDFC Bank. Loans sold in the preceding 12 months amounted to ₹ 34,513 crore.
Notably, as of September 30, 2022, the outstanding amount in respect of individual loans sold was ₹ 93,566 crore. HDFC continues to service these loans.
Net interest margin for the half-year that ended September 30, 2022, came in at 3.4%. The spread on loans over the cost of borrowings for the half-year that ended September 30, 2022, was 2.28%. The spread on the individual loan book was 1.91% and on the non-individual book was 3.65%.
On BSE, HDFC shares closed at ₹2,493.95 crore down by 0.54%. The company's market cap is over ₹4.53 lakh crore.
On stock performance, Jani stated that “The stock trades at 1.5x core ABV on Sep’24 ABV."
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