HDFC reported a 4.7% fall in standalone net profits at Rs.3051 crore for the Jun-20 quarter. However, profits were sequentially up by 36.68%. This was inclusive of a pre-tax gain of Rs.1241 crore from the sale of 26 million shares of HDFC Life. However, on a consolidated basis, HDFC reported 14.6% growth in net profits at Rs.4059 crore.

HDFC reported overall revenue from operations at Rs.13,018 crore for the Jun-20 quarter marginally higher than the Jun-19 quarter but nearly 8.7% higher sequentially. Net interest income or NII for the Jun-20 quarter was up 10% at Rs.3392 crore. However, the net interest margins or NIM were lower by 20 basis points at 3.1%.

HDFC has aggressive fund raising plans for the year and has approval to raise Rs.45,000 crore via issue of secured redeemable, NCDs on private placement basis. The average size of individual loan fell 10% to Rs.24.6 lakhs, largely due to lockdown in major cities. As of June end, HDFC had AUM of Rs.531,000 crore with individuals accounting for 74%.

The good news for HDFC is that the loans under moratorium fell by 600 bps 16.6%. The absolute gross NPAs were down 3.1% in the Jun-20 quarter. NPAs as a percentage were 0.92% for individuals and 4.1% for non-individuals. The pressure on NIMs and the risk of the AUM under moratorium put pressure on the HDFC stock on 30 July.