HDFC net profit misses estimates, declines 17% to ₹1,566 crore
MUMBAI: Housing finance lender Housing Development Finance Corp Ltd on Wednesday reported 16.84% decline in its June quarter net profit to ₹1,566 crore. However, the company’s profit in the year-ago quarter, of ₹1,871 crore, 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 ERGO 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 company said for this quarter, the tax rate was higher at 34% compared to 30.7% in the corresponding quarter of the previous year because the stake sale of HDFC ERGO attracted long-term capital gains tax at a lower rate of 23.07% compared to the marginal tax rate.
“We expect the tax rate to significantly reduce in the subsequent quarter on account of dividend income and sale of investments,” the company said in a release to the stock exchanges.
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 consolidated basis, HDFC reported a net profit of ₹2,733.87 crore, down 2.3% from ₹2,796.92 crore a year ago. Total 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 crore on private placement basis.