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Informist, Wednesday, Jan. 22, 2025

By Kabir Sharma

MUMBAI – Housing and Urban Development Corp. Ltd on Wednesday reported a 41.6% jump in its Oct-Dec net profit on the back of strong growth in disbursements, comfortably beating analysts' expectations. For the quarter, the housing financier saw its bottomline rise to INR 7.35 billion on the back of a 149% increase in disbursals to INR 100.61 billion.

HUDCO was seen reporting a net profit in the range of INR 5.89 billion to INR 6.32 billion for Oct-Dec. Despite the jump in net profit and the company announcing an interim dividend of INR 2.05 per share, the stock ended 1% lower at INR 227.46 on the National Stock Exchange on Wednesday.

For the nine months ended December, the company's net profit rose nearly 40% from a year ago to INR 19.81 billion and total income rose 30.2% to INR 74.93 billion. During the period, loan disbursements by the state-backed company grew over four times to INR 317.60 billion from INR 77.68 billion in the corresponding period a year ago.

The sharp growth in net profit can be attributed to the heavy disbursements. Loans outstanding were at INR 1.19 trillion as on Dec. 31, up 40.9% on year. In terms of the loan mix in the portfolio, the share of affordable housing has been decreasing steadily over the past few years with it falling to 40.2% as on Dec. 31 from 57.0% at the end of 2021-22 (Apr-Mar). As on Dec. 31, 59.8% of loans were for urban infrastructure, whereas the remaining were for affordable housing. 

Interest income of the company--the main source of revenue--rose 38.7% on year to INR 27.46 billion in Oct-Dec. This in turn led to total income of the company recording its highest growth in 20 quarters. Total income for Oct-Dec rose 37.1% on year to INR 27.60 billion.

The company also reversed impairments on financial instruments and write-offs to the tune of INR 168.40 million, which aided the bottom line.  

A surge in demand for loans led to the company needing more funds to meet the demand, which meant that it had to shell out a higher cost for raising funds. Consequently, finance costs rose 34.3% in Oct-Dec to INR 17.63 billion. Total borrowings of the company rose to INR 1.00 trillion in the nine-months ended December from INR 657.19 billion in the corresponding period a year ago. However, the average cost of borrowing moderated, falling to 7.34% from 7.70% earlier. 

Provisions made by the company for loans as per the expected credit loss method fell 15.8% on year to INR 19.54 billion at the end of December from INR 23.21 billion year ago.

In addition to not having any fresh non-performing project loans, the company resolved three previous non-performing loans which had an outstanding amount of INR 203.30 million.  End

Edited by Ashish Shirke

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