Mortgage major HDFC today reported an 11 % rise in its standalone net profit at Rs 1,723.10 crore in the three months to March on higher retail loan growth which grew 26 percent.
"It's the volume-driven growth that we have seen in the course of the year, and that is what has contributed to our profitability," vice-chairman and chief executive Keki Mistry told reporters.
For the full year, HDFC's standalone net profit rose 12 % to Rs 5,440.24 crore, while profit before dividend, sale of investments and tax stood at Rs 6,635.67 crore, reflecting a growth of 15 %.
On a consolidated basis, the full year net income grew to Rs 7,947.82 crore, a growth of 20 %.
The mortgage lender's standalone net interest margin for the year stood at 4.1 %, up from 4 % in the December quarter, and the spread on loans stood at 2.29 %.
"In the last 10-15 years, our real spread has been between 2.2 and 2.3 %. We continue to believe the spread will continue to be broadly in that range," Mistry said.
Gross non-performing loans stood at Rs 1,357 crore, which is equivalent to 0.69 % of the loan portfolio as of end-March compared to 0.77 % in December quarter.
The NPA of individual portfolio stood at 0.53 percent, while that of non-individual portfolio was 1.01 %.
During the quarter, HDFC received near Rs 550 crore from sale of Hiranandani Palace Gardens, a Chennai-based property, which became a non-performing assets in the second quarter of this year.
The property was developed by Mumbai-based Hiranandani Group and Hirco, an ex-Hiranandani group company. HDFC declared the property an NPA after the promoters defaulted on repayment.
As of end March, the total assets of the company rose 16 % to Rs 2,25,757 crore from 1,95,361 crore last year, while the loan book stood at Rs 1,97,100 crore as against 1,70,046 crore last year.
Loans sold during preceding 12 months was to Rs 6,944 crore, of which Rs 5,317 crore was sold in the March quarter.
It saw a 26 % growth in the individual loan book after adding back the loans sold in the preceding 12 months. This comprises 71 % of the total loan book of the mortgage lender, and 85 % of the incremental loan growth in the reporting fiscal.
The average size of individual loans stood at Rs 22.1 lakh as against Rs 21.6 lakh last year and non-individual loan book grew 9 %.
"Lower growth in the non-individual business is function of two things--one is the slowdown in the investment cycle in the economy, and the second is that we have become much more cautious in terms of non-individual business, given what was happening during course of the year," Mistry said.
"My belief is that once we have a stable government after the elections the investment cycle hopefully will start picking up. Once the investment cycle restarts demand for commercial real estate will increase," he added.
He expects the individual loan business will continue to grow in the range of 18-20 %.
As of March end, the total loans outstanding in respect of loans sold or assigned stood at Rs 20,663 crore.
When asked about higher foreign holding in the company, Keki said though 76 % of HDFC shares are held by FIIs, those shares are being bought in domestic market.
He said the company is not listed overseas, it does not have any foreign employee or any foreign director. "So, by virtue of all this, we continue to believe that we are a domestic institution. However, for a technical reason if we are classified as a foreign company, then I am hopeful that FIPB will treat us a domestic company," Mistry said.