HDFC Q4FY14 Net Profit Surges By 10.8% To Rs 1723 crore
DSIJ Intelligence / 07 May 2014
HDFC India's largest mortgage lender posted stable fourth quarter FY14 results which were inline with the street expectations. The performance on all the fronts such as asset quality, steady margins and growth in individual loan book assisted HDFC to post decent numbers.
HDFC, country's biggest lender posted stable set of numbers for Q4FY14. On standalone basis net profit of HDFC has increased by 10.8% on yearly basis to Rs 1723 crore for Q4FY14. This was supported by similar increase in net interest income (NII) and profit on sale of investments. NII increased by 9 per cent on yearly basis to Rs 2073 crore for Q4FY14, whereas profit on sale of investment stood at Rs 127 crore for the quarter, which is 22% up on yearly basis.
Total loan of the company increased by 15.88% on yearly basis and stood at Rs 1.97 lakh crore at the end of Q4FY14. However, company sold around Rs 5317 crore individual loan to banks in this quarter and if we include that, then the loan growth would have been 20%. Out of this, loan given to individuals grew by 26%. As loan given to individual constitutes 70% of total book, 85% of loan book growth has happened in individual loans and 15% growth on non- individual loans. According to the management as economy is not doing well there are less demand of non-individual loans and moreover it was conscious decision by the management of the company to go slow on non-individual loans. Nonetheless, after election as expected if stable government comes in the centre, non-individual loan will also grow at decent pace. Delhi and NCR remains the highest contributor of loan for the company followed by Mumbai. Average loan amount stood at Rs 22.10 lakh for the year witnessing a growth of 2% against 8-10% growth seen earlier. Therefore, large part of loan growth came due to volume growth.
Asset quality of the company remains best in industry and has improved on sequential basis. Gross non-performing loan (GNPL) of the company has seen a decline of 8 basis points on sequential basis to 0.69% of gross loans. Individual loan saw improvement of 4 basis points to 0.53%, whereas non-individual loan GNPL improved by 17 basis points to 1.01%.
The spread for the year came at 2.29%, which has increased by 4 basis points from the nine month ending December 2013. Net Interest Margin improved by 10 basis points on sequential basis and stood at 4.1%.
The board of directors of the bank has recommended a dividend of Rs 14 per share for FY14.
Shares of the company are trading at price to book value of 4.2 times and look fairly valued.
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