HDFC has reported a 19% growth in profits and 15% rise in interest income for the September quarter. The company's performance is in line with our expectations.
Income from Operations
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (eoy) (m)
Diluted Earnings per share*
P/E (at current price)
In this tough economic environment also, HDFC's operating margins improved by 150 basis points. This fueled its operating profits, which jumped by 21%. The company is planning to tap overseas market for raising around 100 m yen for lending purposes. The interest rate for the loan is estimated to be about 300 basis points lower than the domestic prime-lending rate. This is likely to improve its operating margins further in the current year.
HDFC's disbursements and approvals witnessed a healthy growth of 29% in the first half. The growth was partly fueled by the amalgamation of Home Trust Housing Finance Company. Since the company was amalgamated with effect from October 1, 2000, previous year figures are not comparable strictly speaking. Approvals and disbursements for individual loans were also higher by about 40%. Increased tax incentives and stagnant property prices fueled the growth.
HDFC's outstanding growth in revenues was supported by a 24% rise in interest income and 35% growth in lease rentals. Also, during the first half the company received Rs 514 m from sale of shares in HDFC Asset Management Company to Standard Life. Excluding this revenue stream, income from operations of the company grew by just 10.1%. The degrowth in income from capital market related activities (dividend and investment income) trimmed the topline growth.
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