HDFC – Disbursement slips marginally

HDFC – India’s largst Housing Finance company reported net profit of Rs5.34bn (higher than our estimate), a ~32% yoy growth on a pre-exceptional basis (17% yoy de-growth including exceptionals). As anticipated, there is some moderation in disbursement growth to ~23% in Q2FY09 from ~26% in FY08 in the context of high interest rates, however approvals have continued to grow at ~26% yoy to ~Rs141.8bn.

Growth in the retail segment continues unabated with individual disbursements up 30%+ yoy. Despite sustained loan growth and elevated property prices & interest rates, HDFC has witnessed an improvement in asset quality in Q2FY09. Gross NPAs and Net NPAs have declined in absolute and percentage terms on a yoy and qoq basis.

Break-up of HDFC’s loan book:
Individuals – 54,726 crore
Corporate – 24,509 crore
Others – 1,959 crore
Financing for Realty Projects – 755 crore