HDFC Q1 net profit eases on higher provisioning

Shares of Housing Development Finance Corporation (HDFC) retreated after sliding 3% in early morning trading as investors opted for caution ahead earning release wherein it was expected to a hit on earnings due to the Covid-19 pandemic.
However, the mortgage lender fared relatively better. It announced a 4.7% on year fall in June quarter standalone net profit at Rs 3,051.5 crore. It reported a net profit of Rs 3,203.10 crore in the June quarter of FY20.
Revenue came at Rs 13,017.7 crore in Q1FY21 against Rs 12,990.3 crore in the corresponding quarter of the previous year.

Net interest income (NII) for the June quarter came at Rs 3,392 crore, up 10.17% against Rs 3,079 crore in Q1FY20.
Overall, it was a decent show in a tough quarter. Almost 70% of the builder loan book is under moratorium. In fact, the moratorium of 16.6% of individual and 22.4% of total loans was a key highlight.
The Rs 50,000-crore plus of moratorium in non-individual loans could lead to uncertainty.
The challenges to retail loan growth remain because of the lockdown. However, the excess provisions can cushion against future losses.

HDFC shareholders have approved raising up to Rs 1.25 lakh crore by issuing bonds or other hybrid instruments on a private placement basis. The approval was received at the company’s annual general meeting (AGM) held through audio visual medium.
As of 30-Jun-2020, DIIs held 9.44% stake in the firm, while foreign institutional investors held 70.17%.
HDFCs’ total market cap stood at Rs 307849.7 crore.

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