HDFC Q4 Results: Profit surpasses Analysts' Estimates

Key insights of Q4 results:

Net profit beats estimates: HDFC Ltd has reported a 16.35% year-on-year rise in standalone net profit at Rs 3,700 crore for Jan-Mar 22 quarter, beating street estimates. Analysts had earlier anticipated a net profit of about Rs 3,518 crore. 

The total revenue from operations increased 5% to Rs 12,300 crore in the quarter under review as against Rs 11,697 crore in the same quarter last fiscal.

Net interest income rises: NBFC's primary business is to borrow money and lend the same at a rate higher than the rate at which they borrowed. The income generated from this differential is known as net interest income. This is an extremely important number to truly find out how much the company is earning from its core operations. HDFC's net interest income (NII) increased by 14% year-on-year to Rs 4,601 crore in Q4FY22 from Rs 4,027 crore in Q3FY21. The Net Interest Margin (NIM) was 3.5%.

Strong loan growth: HDFC’s assets under management (AUM) at the end of the March quarter, stood at Rs 6.54 lakh crore, up 15% from the year-ago period. Individual loans comprise 79% of the total AUM. On an AUM basis, the growth in the individual loan book was 17%. The growth in the individual loan book, after adding back loans sold in the preceding 12 months was 25%. The growth in the total loan book after adding back loans sold was 20%. 

Asset quality: The gross individual NPAs stood at 1.91% of the individual portfolio as of Mar 31, compared to 2.32% in the previous quarter. The gross individual non-performing loans (NPLs) stood at 0.99% of the individual portfolio, while the gross non-performing non-individual loans stood at 4.76% of the non-individual portfolio.

This marks a significant improvement compared to December 31, 2021, where the gross individual NPLs stood at 1.44% and the gross non-individual NPLs stood at 5.04% of the non-individual portfolio. Total NPLs as of December 31, 2021, stood at 2.32% of the portfolio against 1.91% as of March 31, 2022.

Capital Adequacy Ratio: HDFC's capital adequacy ratio stood at 22.8%, of which Tier I capital was 22.2% and Tier II capital was 0.6%. As per regulatory norms, the minimum requirement for the capital adequacy ratio and Tier I capital is 15% and 10%, respectively.

Restructured loans: The loans restructured under the RBI’s Resolution Framework for COVID-19 Related Stress were equivalent to 0.80% of the loan book. Of the loans restructured, 98% are individual loans and 2% are non-individual loans. The largest account restructured under the resolution framework of Rs 2,764 crore was fully repaid as of March 31, 2022. 

Dividend: The board of directors also recommended a dividend for the year ended March 31, 2022, of Rs 30 per equity share of a face value of Rs 2 each, compared with Rs 23 per equity in the previous year. 

HDFC Ltd share price closed 1.31% higher at Rs 2,259 per share on Monday.