HDFC Ltd

India’s largest mortgage company, HDFC did well for Q2FY13. On an 18% (YoY) rise in standalone NII at Rs.1634 crore, it posted a 19% rise in net profit at Rs.1151 crore. On a consolidated basis, NII was up 27% (YoY) at Rs.3732 crore and net profit was at Rs.1575 crore, up 23%. The market was mainly disappointed that its NIM fell marginally from 4.3% in Q1FY13 to 4.2% in current Q2. And the institution also stated that it hopes to maintain the NIM at around 3.9 to 4.2% levels in the current fiscal.

The main contributor to its growth was loan, which grew 23%, driven mainly by retail loans. It sold individual loans up to Rs.5,630 crore and Q2 spreads for non-individual business grew by 2.27%.  It expects loan book to grow 18-20% in FY13. Asset quality remains strong as its Gross NPA declined to 0.77% of the loan portfolio, as compared to 0.82% in Q2FY12. Overall, its performance remained very strong and going ahead, it is expected to get better once interest rate cycle starts moving down. With HDFC concentrating more on individual loans rather than corporate, its volume growth will lead the numbers as has already been indicated.