Registers rise in income, disbursements; to take view on lending rates by month-end

Our Bureau

Mumbai, July 18

HDFC has reported 20 per cent growth in net profit for the first quarter of the current fiscal.

Net profit amounted to Rs 296.82 crore for the quarter ended June, against Rs 247.28 crore for the corresponding previous period.

Income from operations grew 33.6 per cent to Rs 1,245.72 crore (Rs 932.55 crore), while income from interest on loans rose 36.3 per cent to Rs 1,037.19 crore (Rs 760.67 crore).

Total expenditure rose 39.5 per cent to Rs 868.08 crore (Rs 622.37 crore).

Of this, interest and other charges increased by 41.4 per cent to Rs 801.41 crore (Rs 566.86 crore).

"We have managed to maintain our spread during the quarter at 2.1-2.2 per cent," said Mr Deepak Parekh, Chairman, on the sidelines of the company's AGM today, referring to the rising cost of borrowings.

HDFC'S gross profit, after interest and before depreciation and taxation, rose 21.8 per cent to Rs 380.45 crore (Rs 312.39 crore).

Loan approvals were higher by 30 per cent at Rs 5,998 crore, while disbursements grew by 28 per cent to Rs 4,386 crore.

The housing loan portfolio (including loans outstanding, deposits and investments in preference shares and debentures for financing real estate related projects) as on June 30, 2006 amounted to Rs 49,234 crore, an increase of 26 per cent.

Capital adequacy ratio stood at 13.3 per cent of the risk weighted assets against the minimum requirement of 12 per cent.

Tier-1 capital adequacy was at 7.8 per cent against a minimum of six per cent.

On Tuesday, the HDFC scrip closed at Rs 1,070 on the BSE, ending marginally lower than the previous close of Rs 1,082.05.

Lending rates

HDFC will take a view on its lending rates by the end of the month, according to the Chairman.

"I expect interest rates to go up marginally and property prices to come down, perhaps by 20-30 per cent."

The company had raised 10-year bonds at 7.8 per cent in January this year and at 8.75 per cent in March, he added.

Today, the rates are over nine per cent.

He also said that property prices will come down as investors move out of the market making way for actual user-buyers.

He added that the current rates were "ridiculously high and unsustainable."

The company has applied for FIPB approval for an international property fund that it plans to launch soon, according to Mr Parekh.

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(This article was published in the Business Line print edition dated July 19, 2006)
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