The Hindu Business Line : HDFC net jumps 16.7 pc in Q4; to pay Rs 17/share

HOUSING Development Finance Corporation (HDFC) has reported a 16.7 per cent increase in net profit for the fourth quarter ended March 31, 2005. Net profit for the quarter amounted to Rs 347.8 crore against Rs 297.97 crore in the corresponding quarter of the previous year.

The company has announced a dividend of Rs 17 per share. Income from operations at Rs 952.3 crore (Rs 824.3 crore) rose by 15.5 per cent.

Gross profit increased 16.6 per cent and stood at Rs 418.3 crore (Rs 358.3 crore); while profit before tax stood at Rs 412.99 crore (Rs 351.7 crore), showing an increase of 17.4 per cent.

For the year 2004-2005, the company reported a 21.6 per cent increase in net profit at Rs 1036.59 crore, against Rs 851.78 crore the previous year.

"Our spread has been maintained at 2.17 per cent; non-performing loans are lower compared to earlier and the cost-income ratio is down from 13.3 per cent to 12.9 per cent," said Mr Keki M. Mistry, Managing Director, on the company's increase in profits for the year.

The cost-to-income ratio of the company has improved every year for the last seven years, and is the lowest among all the financial institutions, he said.

Expenditure for the year as a whole was contained well, said Mr Mistry. While income from operations rose 10.8 per cent, to Rs 3400.6 crore, up from Rs 3068.76 crore the previous year, total expenditure rose by only 5.3 per cent, to Rs 2134.96 crore (Rs 2027.28 crore).

Gross profit rose 21.4 per cent, to Rs 1275.5 crore (Rs 1050.6 crore) while profit before tax rose by 22.3 per cent, recorded at Rs 1256.79 crore (Rs 1026.98 crore). Provision for tax was 25.68 per cent higher, at Rs 220.2 crore (Rs 175.2 crore).

The company's return on equity is 28.5 per cent and the capital adequacy ratio at 13.4 per cent. "The company does not need capital for the next two years," said Mr Mistry.

Loan disbursals for the year totalled Rs 12,697 crore, increasing by 28 per cent; approvals aggregated to Rs 19,715 crore, up 30 per cent. The total loan portfolio of the company at Rs 37,216 crore, rose by 29 per cent over the year.

The consolidated annual net profit amounted to Rs 1,124 crore, up from Rs 947 crore; profit after tax amounted to Rs 1,124 crore, up from Rs 947 crore.

On the likelihood of HDFC increasing its loan interest rates, Mr Mistry said that would depend on how the cost of borrowings would move.

The board of directors on Thursday approved the reappointment of Mr Deepak Parekh as the company's Managing Director (Designated as Chairman) for three years with effect from March 1, 2006, and the reappointment of Mr K.M. Mistry as Managing Director for five years with effect from November 14, 2005, subject to shareholders' approval.

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