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The pace of growth set by the country’s largest standalone housing finance company, HDFC, has been bettered by its two smaller peers — Indiabulls Housing Finance Limited and Dewan Housing Finance Limited.
Despite the overall slowdown in economic growth, there seems to be good demand for housing loans from individuals in the tier-II and tier-III cities of the country.
The outskirts of the large metros also seem to be witnessing good demand for home loans, where house prices are still ruling in the so-called “affordable bracket.”
For Indiabulls Housing Finance Ltd, first quarter net profit grew by 21 per cent, while for Dewan Housing Finance Company (DHFL), net profit jumped 22 per cent during the quarter. The Mumbai-based lenders bettered the growth rate achieved by HDFC, which logged a profit growth of 15 per cent in the April to June period.
In the reporting quarter, Indiabulls posted a net profit of ₹424 crore against ₹351 crore, a year ago. In the same period, DHFL’s net profit grew to ₹147 crore from ₹120 crore, a year ago.
According to top bosses at these housing finance companies and even at much smaller housing finance entities, growth is happening across the country.
Lenders are enthused to give housing loans as the non-performing assets are one of the lowest across the different categories of loans (such as vehicle, agriculture, MSME and corporate) as most buyers are first-time buyers who buy their houses for self-occupancy. Gross non-performing assets of IBHFL, DHFL and HDFC continue to remain below 1 per cent.
Constant demand Also, given that there is an acute shortage of houses in the affordable segment (houses costing less than ₹30 lakh) in metro cities means that there is a constant demand and the supply is lapped up as soon as it gets created.
Lenders remain optimistic about growth in the future as mortgage penetration in India, as a percentage of gross domestic product, is one of the lowest in the world (at about 8 per cent) compared to over 80 per cent in many advanced economies.
These housing finance companies are likely to continue to do well in the coming quarters as the government has, in the Budget, announced certain measures to boost the stocks of affordable housing and incentivise tax-payers.
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