Financial Performance of Housing and Development Finance Corporation Ltd during FY20
During FY20, HDFC net profit grew significantly by 84% y-o-y to Rs 177 billion from FY19. Net Interest Income also rose by 12.63% to Rs 129 billion during FY20. On asset quality, gross NPA stood at 1.99% as of March 31, 2020, as compared to 1.18% as of March 31, 2019. Net Interest Margin remained stable at 3.4% during FY20 as compared to 3.3% in previous fiscal.
Housing and Development Finance Corporation HDFC Ltd, a housing finance company, was formed in 1977 by International Finance Corporation(IFC), Washington, and the Aga Khan Trust. As on March 31, 2020, HDFCs gross loans, stood at Rs. 5,167.73 bn. The companys market capitalization is at Rs 2,828 billion as of 31st March 2020. Its total employee count was at 3095 as of 31st March 2020.
HDFC Ltds subsidiary includes HDFC Life insurance company, HDFC Ergo, HDFC AMC, and HDFC Credila respectively.
HDFC Ltd has been rated as AAA for its long term borrowing and A1+ for short term borrowing by CRISIL, ICRA and India Rating Ltd.
Financials
| Parameters(Rs billion) | FY20 | FY19 | Growth |
|---|---|---|---|
| Net Interest Income | 129.04 | 114.57 | 12.63% |
| Total Income | 587.63 | 433.78 | 35.47% |
| PAT | 177.7 | 96.32 | 84.49% |
| Total Asset | 5240.94 | 4587.78 | 14.24% |
| Total Equity | 861.58 | 773.55 | 11.38% |
| NIM(%) | 3.4 | 3.3 | |
| ROE(%) | 21.7 | 13.51 | |
| Gross NPA(%) | 1.99 | 1.18 | |
| CRAR(%) | 17.6 | 19.1 | |
| Tier I(%) | 16.5 | 17.5 | |
| Tier II(%) | 1.1 | 1.6 |
Strong market position-
It is Indias largest housing finance company, with a strong presence in the individual housing and corporate segments. While competition has increased over time, with the entry of new players and greater focus by banks on this segment, HDFC has maintained its market share. As of March 31, 2020, HDFCs gross loan book stood at Rs 5,167.73 bn, a growth of 11.9% over the previous year.
Comfortable asset quality-
HDFCs asset quality remains comfortable although in a weakening manner. The gross non-performing assets (NPAs) as on March 31, 2020, were 1.99% as compared to 1.18% as on March 31, 2019 and 1.11% as on March 31, 2018. The NPAs have experienced an uptrend from March 31, 2017 levels due to delinquencies in the non-individual portfolio.
Diversified and stable resource profile- HDFC Ltds resource profile is well-diversified, lending flexibility to HDFCs borrowings. The borrowing mix primarily comprises of market borrowings (43%), fixed deposits (32%), and term loan(21%). HDFC raised external commercial borrowings (ECBs) of USD 1.2 bn in fiscal 2019. HDFCs strong resource-raising capabilities, high fixed deposit renewals, and the high proportion of floating rate home loans in its portfolio mitigate the inherent tenure mismatch and interest rate risks in the housing finance business.
Robust equity capitalization-
Its net worth increased by 11.38% to Rs 861.58 billion in FY20 denoting healthy equity infusion. Regarding risk profile, its capital adequacy ratio came in at 17.6% with Tier I ratio of 16.5% as of March 31, 2020. Return on equity rose considerably to 21.7% in FY20 from 13.5% in FY19.