MUMBAI: HDFC has reported a 15% rise in its third quarter (Oct-Dec 2008) net profit at Rs 541.99 crore against Rs 471.9 crore in the corresponding quarter last year. The numbers do not include the exceptional gain that the company made through sale of shares in HDFC Standard Life in Q3 of the previous fiscal. But if one were to include the exceptional gain made in Q3 of previous fiscal, its net profit would show a 15% decline at Rs 546 crore.
HDFC���s profit, before considering profit on sale of investments, other income, exceptional items and tax, stood at Rs 774.5 crore against Rs 652.5 crore in the corresponding quarter of the previous year ��� an increase of 19%.
For the nine-month period ended December 31, 2008, the net profit was down 7%, again due to exceptional gain last year. Without exceptional items, the nine-month profit increased 24% to Rs 1,515.3 crore as against Rs 1,217.3 crore in the corresponding period of the previous year.
Keki Mistry, vice-chairman and managing director, told ET that the interest expenses had gone up because of a Rs 50 crore mark-to-market provisioning on forex liabilities arising out of its foreign currency convertible bonds. This provision was charged to the interest expense account. As a result of the additional charge, interest expense grew 55.2% y-o-y in the December quarter compared with 43.6% in the September 2008 quarter. Without the additional charge net interest margins were at 2.19%.
Its interest income grew by 42.7% y-o-y, which is comparable to previous quarter. HDFC���s cost of funds has come down sharply from mid-December and it has borrowed long-term funds at 9% after several months in January. This has enabled HDFC to cut lending rates resulting in increased borrower interest from January 2009.
On the business side, the advances grew 23.8% y-o-y in December quarter, which is less as compared to 30.9% growth in the September quarter. However, the slowdown in loan book growth is in line with the trend seen in the finance industry, wherein companies have gone slow in lending to check non-performing assets. HDFC���s slowdown was also on account of near-zero growth in corporate loans in the past two months.
Unlike advances, the deposits grew by 28.5% in the similar period. The growth in advances is much higher than the trend seen so far. This, along with high cost of deposits, has pushed up the interest expense in the December quarter. However, a high deposit mobilisation also shows that the company expects the advances growth to scale up in the coming quarters and in this regard the December quarter can just be considered an aberration.
HDFC���s profit, before considering profit on sale of investments, other income, exceptional items and tax, stood at Rs 774.5 crore against Rs 652.5 crore in the corresponding quarter of the previous year ��� an increase of 19%.
For the nine-month period ended December 31, 2008, the net profit was down 7%, again due to exceptional gain last year. Without exceptional items, the nine-month profit increased 24% to Rs 1,515.3 crore as against Rs 1,217.3 crore in the corresponding period of the previous year.
Keki Mistry, vice-chairman and managing director, told ET that the interest expenses had gone up because of a Rs 50 crore mark-to-market provisioning on forex liabilities arising out of its foreign currency convertible bonds. This provision was charged to the interest expense account. As a result of the additional charge, interest expense grew 55.2% y-o-y in the December quarter compared with 43.6% in the September 2008 quarter. Without the additional charge net interest margins were at 2.19%.
Its interest income grew by 42.7% y-o-y, which is comparable to previous quarter. HDFC���s cost of funds has come down sharply from mid-December and it has borrowed long-term funds at 9% after several months in January. This has enabled HDFC to cut lending rates resulting in increased borrower interest from January 2009.
On the business side, the advances grew 23.8% y-o-y in December quarter, which is less as compared to 30.9% growth in the September quarter. However, the slowdown in loan book growth is in line with the trend seen in the finance industry, wherein companies have gone slow in lending to check non-performing assets. HDFC���s slowdown was also on account of near-zero growth in corporate loans in the past two months.
Unlike advances, the deposits grew by 28.5% in the similar period. The growth in advances is much higher than the trend seen so far. This, along with high cost of deposits, has pushed up the interest expense in the December quarter. However, a high deposit mobilisation also shows that the company expects the advances growth to scale up in the coming quarters and in this regard the December quarter can just be considered an aberration.
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...moreDownload The Economic Times News App to get Daily Market Updates & Live Business News.
Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.
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