HDFC's Q1FY19 net profit rises by 54% to Rs 2,190 crore; will raise NCDs worth Rs 35,000 crore

The largest NBFC- Housing Development Finance Corp (HDFC) posted a strong June 2018 quarter (Q1FY19) 53.74% jump in net profit to Rs 2,190 crore, compared to net profit of Rs 1,424.47 crore in the corresponding period of the previous year. With this performance, HDFC has surpassed analysts estimate, as Bloomberg poll of experts predicted earnings to come in at Rs 2,170 crore this quarter. However, despite a better quarter, the share price of HDFC ended on a negative note at Rs 2,028.85 per piece down by 0.80% on the BSE. 

Total income was at Rs 9,951.98 crore this quarter which was above 20.05% from Rs 8,289.98 crore a year ago the same period. 

During the quarter, HDFC assigned loan amounting to Rs 9,714 crore. All the loans assigned during the June 2018 quarter were to its parent HDFC Bank pursuant to the buyback option embedded in the home loan arrangement between HDFC and the HDFC Bank. The income on the loan assignment transactions with HDFC Bank is being received as a servicing income, which is recognised over the life of the asset. 

In a meeting held today, the HDFC board of directors approved the issue of secured redeemable NCD aggregating to Rs 35,000 crore on a private placement basis. 

Further, the board also approved raising of external commercial borrowing (ECB) up to $1.5 billion equivalent from financial institutions, bank, multilateral financial agencies, mutual funds, body corporate, firms, association of persons or such other entities. Such approval is now subject to RBI approval. 

Also, BS Mehta and Dr Bimal Jain who were Independent Directors of the HDFC have resigned from the board with effect from the conclusion of the aforesaid meeting today.