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HDFC's net up 14%

Jan 18, 2001

HDFC has reported a year on year 14% increase in operating income for the 3QFY01. The corporation's profits growth has been slowed down during the current quarter due to decline of more than 80% in other income. However, it has improved operating margins by around 80 basis points.

(Rs m) 3QFY00 3QFY01 Change
Income from Operations 5,096 5,797 13.8%
Other Income 7 1 -83.3%
Interest Expenditure 3,690 4,149 12.4%
Operating Profit (EBDIT) 1,406 1,648 17.2%
Operating Profit Margin (%) 27.6% 28.4%  
Other Expenses 189 242 28.0%
Depreciation 120 140 16.8%
Profit before Tax 1,104 1,268 14.8%
Tax 153 182 18.6%
Profit after Tax/(Loss) 951 1,086 14.2%
Net profit margin (%) 18.7% 18.7%  
No. of Shares (eoy) (m) 119.1 119.1  
Diluted Earnings per share* 31.9 36.5  
P/E (at current price) 17 15  
*(annualised)      

HDFC's approvals during the third quarter grew by 25% to Rs 15.5 bn and disbursements by 26% to Rs 13.5 bn ( during the nine months of FY01 approvals and disbursements grew by 31% and 30% respectively).

The corporation's aggressive focus on retail market by increasing distribution outlets and enhanced tax incentives provided in the last budget has enabled it to maintain a high growth rate. Approvals and disbursements in respect of individual loans were higher by 52% and 54% respectively during the 9 months of FY01 and retail deposits aggregated to Rs 18 bn, an increase of 43% compared to corresponding previous period.

HDFC's topline and profits growth in the first nine months was around 19% and 18% respectively. Decline in dividend income and lease rentals led to slower growth. Excluding this, revenues grew by an impressive 23%.

Break-up of interest income
(Rs m) 9m FY00 9m FY01 Change
Interest on loans 9,657 11,741 21.6%
Fees and other charges 504 675 33.8%
Dividend income 1,066 958 -10.2%
Profit on sale of investments 360 563 56.3%
Lease rental income 386 318 -17.5%
Other operating income 2,451 2,927 19.4%

At the current market price of Rs 531, HDFC is trading at a P/E multiple of 15 times its third quarter annualised earnings and 13 times its FY01 projected earnings. We have projected an earnings growth of 17% for the year ended March 2001. HDFC's nine months performance is in line with our full year projections.


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