While the days of 20-25 per cent net profit growth are quite behind the company, the country’s leading home financier HDFC is still among the most bought stocks of India, given its ability to deliver stable growth even during challenging times. The March quarter (Q4) standalone performance seems to have met this yardstick. Net interest income at Rs 3,123 crore grew 13 per cent year over year, while net interest margin (NIM) continued at 4.1 per cent. Net profit, however, fell 22 per cent year over year to Rs 2,044 crore as March quarter of FY16 included Rs 1,520 crore of profit from stake sale in its life insurance business. Adjusted for this, Q4’s net profit grew 14 per cent.
However, seen against the December quarter run-rate where NII grew 17 per cent year on year and net profit rose 12 per cent, Q4’s performance suggests interest-rate transmission to borrowers has led to moderation in growth. “Cost of funds moderated in December quarter and hence we passed on this benefit to our customers in March quarter, which is why NII growth seems a shade low in Q4. But, I believe interest rates have bottomed out, unless there is another round of rate cut,” says Keki Mistry, vice-chairman and chief executive, HDFC.
via HDFC posts another quarter of stable results | Business Standard News
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