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IDFC: Asset quality stays superior

Feb 4, 2013

IDFC declared its results for the third quarter of the financial year 2012-13 (3QFY13). The institution grew its income from operations and profits by 31% and 19% YoY respectively. Here is our analysis of the results.

Performance summary
  • Consolidated income from operations grows 31% YoY in 3QFY13 and by 28% YoY in 9mFY13, on the back of 22% YoY growth in advances. Disbursements increase by 4.5% YoY, but sanctions fall by 13% YoY in 9mFY13 on account of a slowdown in infrastructure activity. However cumulatively sanctions were up by 12% YoY.
  • Overall asset management revenues were flat in 9mFY13, total asset under management (AUM) stands at Rs 298 bn at the end of December 2012. While the mutual fund contributed to some of the growth, fees from the alternatives business faltered.
  • Net interest margins (NIM) decrease marginally to 4.2% from 4.3% earlier.
  • Other income sees an almost 89% fall YoY in 3QFY13 and an 80% fall YoY in 9mFY13, on account of the sale of a stake in IDFC Asset Management Company seen in the previous quarter.
  • Bottomline grows by 19% YoY in 3QFY13 and by 7.5% in YoY 9mFY13 on the back of higher net interest income and lower provisioning, but lower other income made profit growth seem relatively muted.
  • Capital adequacy ratio stands at a robust 22.5% at the end of 9mFY13 (Tier-1 ratio of 20.2%). Net NPAs come in at 0.12% at the end the quarter.

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