Housing Development Finance Corporation Limited ( HDFC ) reported its Q3 results on 2nd February 2021. The net profit had declined by 65% to ₹ 2,962 crore for the quarter ended 31st December 2020. The net profit was ₹ 8,372 crores for the same period in 2019. However, the profit has grown by 2%, from ₹2,870 crores, as compared to quarter ended September 2021.
Revenue from operations too declined by 42% to ₹11,707 crores as compared to ₹20,285 crores in December 2019.
Message from HDFC
“There has been a significant recovery and strong growth in the individual business during the quarter ended December 31, 2020. On a nine month basis from April 1, 2020 to December 31, 2020, the impact of the pandemic induced lockdown has to be factored in and hence the current and previous year’s numbers are not directly comparable,” the company stated.
“To facilitate a like-for-like comparison, after adjusting profit on sale of investments and dividend, fair value adjustments and income on loans assigned, fair value gain consequent to the merger of GRUH with Bandhan Bank, employee stock options charge and provisioning, the adjusted profit before tax for the nine months ended December 31, 2020 is ₹10,050 crore compared to ₹ 8,287 crore in the previous year, reflecting a growth of 21%,” said HDFC in a stock exchange filing.
“The demand for home loans continued to remain strong owing to low interest rates, softer property prices, concessional stamp duty rates in certain states and continued fiscal incentives on home loans. The month of December 2020 witnessed the highest ever levels in terms of receipts, approvals and disbursements. During the quarter ended 31 December, 2020, 91% of individual disbursements entailed property deals entered over the past four months, re-affirming that housing demand remains robust and is not pent-up demand,” the company said.
“The COVID-19 induced pandemic has given a strong fillip to various digitalisation initiatives offered by the Corporation. Despite the easing of lockdown restrictions, the trend of digital on-boarding of customers continued. Approximately 81% of new employed borrowers opted for the digital mode. During the quarter ended December 31, 2020, individual loan disbursements grew at 26% over the corresponding quarter of the previous year,” said HDFC.
HDFC Q3 results have missed the street estimates, yet it shows promise for the future. The average home loan size was higher at ₹30 lakhs. The net interest income had grown by 26% at ₹4,068 crores as compared to ₹3,240 crores last December. Home loans had grown in both the affordable and high end segment. The way forward looks good for HDFC and has bright prospects to multiply investor wealth over the short and long term.