InvestorQ : What is the reason for the massive loss reported by Dewan Housing in the March quarter?
Katherine Gonsalves made post

What is the reason for the massive loss reported by Dewan Housing in the March quarter?

Answer
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Rutuja Nigam answered.
3 months ago


DHFL reported a massive pre-tax loss of Rs.10,297 crore in the Mar-20 quarter. This was largely on account of the Rs.12,403 crore write off taken by DHFL in the fourth quarter on account of fair value changes. DFHL netted Rs.4610 crore on account of deferred tax for FY20 due to the changed tax regime that it opted for.

During the quarter, DHFL witnessed a serious drop in loan assets with the total housing loan book falling to Rs.66,203 crore from Rs.97,978 crore last year. The problems only got compounded for DHFL in terms of cash flows as nearly 35% of the loan portfolio had availed the moratorium facility extended by the RBI till the end of August 2020.

The auditor’s report has pointed out that DHFL incurred losses aggregating Rs.13,575 crore in fiscal 2020. This resulted in substantial erosion of the net worth of DHFL. As per the auditors, this had raised serious doubts over the ability of DHFL to continue as a going concern. That would depend on the rapid completion of the insolvency resolution process.

The COC has extended deadline for submission of bids to July 24 on account of the Covid-19 pandemic. It is still not clear who are the likely interested parties for this company considering the mountain of bad loans that they are currently sitting on.