HDFC net profit misses estimates, declines 17% to ₹1,566 crore
MUMBAI: Mortgage lender Housing Development Finance Corp. Ltd (HDFC) on Wednesday reported a 16.84% decline in its June quarter net profit to ₹1,566 crore. However, the 1,871 crore profit it recorded a year ago was boosted by a one-time gain of ₹697 crore.
Still, the June quarter profit failed to meet Street expectations. According to estimates of 11 Bloomberg analysts, HDFC was expected to post a net profit of ₹1,769.60 crore.
In a statement, HDFC said its results for the quarter are not comparable from a year ago as it sold shares of HDFC ER GO General Insurance Co. to ERGO International AG, an arm of Munich Re for ₹922 crore, and also created a one-time special provision of ₹275 crore as a charge to the statement of profit and loss in the June 2016 quarter.
The leading mortgage lender also clarified that it has an exposure of ₹910 crore towards Essar Steel Ltd, one of the 12 accounts identified by the Reserve Bank of India for initiating bankruptcy proceedings.
“HDFC has made 25% provisioning against Essar Steel and this is likely to increase if the exposure is not settled ,” said Ke ki Mistry, vice-chairman and chief executive officer, HDFC, on the sidelines of its annual general meeting. “RBI’s 50% additional provisioning norm for accounts referred to NC LT will not apply to us,” he added.
Provisions for the quarter fell 75% to ₹85 crore against ₹340 crore a year ago. Total income declined 3% to ₹8,141.76 crore.
On a consolidated b as is, HDFC reported a net profit of ₹2,733.87 crore, down 2.3% from ₹2,796.92 crore a year ago. Income rose 6.9% to ₹14,463.01 crore. Provisions fell 67.53% to ₹113.77 crore.
HDFC said its board approved issue of non-convertible debentures worth ₹35,000 cr oreo na private placement basis.