Housing finance major HDFC Ltd posted a net profit of Rs 981 crore in the quarter ended December 31, 2011, 10 per cent higher than in the year-ago period. This moderation in net profit is on account of lower profit on sale of investments, which declined to Rs 88 crore (Rs 167 crore in Q3 of FY2011).

The operating profit or profit from core lending operations has increased by 19 per cent, said Mr Keki Mistry, Vice-Chairman and Managing Director.

Last year the company's profit was buoyed by the 2 per cent stake sale in IL&FS.

For the nine-month period ended December, net profit increased by 17 per cent to Rs 2,796 crore (Rs 2,393 crore) and profit on sale of investments fell to Rs 191 crore (Rs 226 crore).

Loan approvals and disbursements in the nine months grew by 19 per cent each compared to the corresponding period in the previous year.

“There is definitely a slowdown in places like Mumbai and Gurgaon. In these places property prices are high. So interest rate becomes an important factor in property purchases. But there is strong demand from Tier-II and Tier-III cities and the outskirts of big cities,” Mr Mistry said.

Loan book

As on end-December, the loan book was at Rs 1,32,208 crore (Rs 1,09,051 crore), an increase of 21 per cent. This is after considering the loans sold to HDFC Bank in the preceding 12 months, amounting to Rs 4,221 crore.

Including the loans sold, the growth in the loan book was 25 per cent. Over the September quarter, the loan book grew 4 per cent.

The spread on loans over the cost of borrowings stood at 2.27 per cent (2.33 per cent).

Gross non-performing assets fell marginally to 0.82 percent of the loans (0.85 per cent). Provisions were at Rs 1,584 crore, against the regulatory requirement of Rs 1,229 crore. Of this, Rs 440 crore is the provision for dual rate home loans, which will get reversed, Mr Mistry said.

“Our provisioning level is much higher than required. We are carrying Rs 355 crore of excess provision,” he added.

Shares of HDFC closed at Rs 687.5, up 0.9 per cent, on the BSE, on Thursday.

> priyan@thehindu.co.in

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