InvestorQ : How did HDFC report such good profit growth in a tough quarter in Dec-21 quarter?
sarah Leo made post

How did HDFC report such good profit growth in a tough quarter in Dec-21 quarter?

Answer
image
Rashi Mehra answered.
3 months ago
Follow

Before we get into the bottom line story, let us look at top line of HDFC first. For the Dec-21 quarter, HDFC revenues fell by -20.28% at Rs.31,298 crore. Sequential revenues were also lower, largely on account of losses on investments in the life insurance business compared to investment gains of Rs.10,044 crore in the Dec-20 quarter. Core income from lending and life insurance premiums were higher yoy. 9-month NII was up 14% at Rs.12,519 crore.

HDFC Ltd

Rs in Crore

Dec-21

Dec-20

YOY

Sep-21

QOQ

Total Income (Rs cr)

₹ 31,298

₹ 39,259

-20.28%

₹ 38,591

-18.90%

PBT (Rs cr)

₹ 7,121

₹ 6,811

4.55%

₹ 6,779

5.03%

Net Profit (Rs cr)

₹ 5,837

₹ 5,177

12.75%

₹ 5,258

11.01%

Diluted EPS (Rs)

₹ 31.79

₹ 28.74

₹ 28.80

PBT Margin

22.75%

17.35%

17.57%

Net Margins

18.65%

13.19%

13.63%

During the Dec-21 quarter, net interest margins or NIMs for first nine months of FY22 stood at 3.6% while credit costs were sharply lower at 0.27%, which is what boosted profits. Cost to income ratio for first 9 months of FY22 were flat at 8.1%. PBT margins improved from 17.35% in Dec-20 quarter to 22.75% in the Dec-21 quarter. Even on a sequential basis, the PBT margins were higher.

Net profits for Dec-21 quarter was up 12.75% at Rs.5,837 crore on a yoy consolidated basis due to robust operating performance getting transmitted. Collection efficiency stood at 98.9%. However, gross NPLs for the individual loans business stood at 1.44% while the gross NPLs of the non-individual business was much higher at 5.04%. The latter is the segment that caters predominantly in the form of loans given to builders and developers.

PAT margins for the Dec-21 quarter at HDFC consolidated group level improved from 13.19% in the Dec-20 quarter to 18.67% in Dec-21 quarter. PAT margins were also sharply higher on a sequential basis by over 500 bps.

12 Views