The net profit for the lending business surged 58% to Rs 601 crore in Q3FY2019, driven by 61% jump in rural business net profit to Rs 233 crore. Housing Finance business net profit moved up 62% to Rs 209 crore, while the wholesale finance net profit also gained 50% to Rs 159 crore.

The consolidated income from operations increased 28% to Rs 3243.99 crore for the quarter ended December 2018, while other income of the company jumped 231% to Rs 272.39 crore. The total income increased 36% to Rs 3516.38 crore for quarter ended December 2018.

Interest expenses increased 33% to Rs 1864.66 crore. Net Interest Income surged 54% to Rs 1174 crore, while fee and income moved up 35% to Rs 416 crore in Q3FY2019. Operating expenses surged 29% to Rs 447.59 crore, allowing the operating profits to improve 42% at Rs 1204.13 crore. The cost-to-income ratio increased to 24.9% in Q3FY19 from 22.0% in Q3FY18.

Depreciation declined 4% to Rs 12.34 crore, while provisions fell 9% to Rs 415.98 crore. Profit before tax surged 106% yoy basis at Rs 775.81 crore for quarter ended December 2018. Effective tax rate increased to 25.1% in quarter ended December 2018 from 13.4% in the corresponding quarter of previous year. Net Profit of the company, after share in profit of associates and non-controlling interest, improved 81% to Rs 579.93 crore for quarter ended December 2018.

Business performance

Loans and Advances grew 22% to Rs 94712 crore at end December 2018 as compared to Rs 77742 crore at end December 2017. Loans & Advances in the focused businesses moved up 23% to Rs 93708 crore at end December 2018 compared with Rs 75948 crore at end December 2017. In the de-emphasized portfolio, the loans & advances dipped 44%.

The company has posted 20% decline in loan disbursements to Rs 13682 crore in Q3FY2019, as the disbursements of housing finance business declined 23% to Rs 2350 crore and the wholesale business disbursements declined 44% to Rs 5598 crore in Q3FY2019. However, the rural business disbursements surged 40% to Rs 5734 crore in Q3FY2019.

In the Investment Management business, Average Assets under Management (AAUM) surged by 15% to Rs 69080 crore as compared to Rs 60313 crore at end December 2017.

In the Wealth Management business, the Average Assets under Service (AAUS) went up by 34% from Rs 17102 crore to Rs 22887 crore.

Asset Quality

Gross Stage 3 assets of the company have declined to 6.74% end December 2018 from 7.10% a quarter go and 10.40% a year ago, while the Net State 3 assets have eased to 2.64% from 2.79% a quarter ago and 4.74% a year ago. The provision coverage ratio improved to 62.00% from 57.00% a year ago.

Rural business: Rural Business net profit has increased 61% to Rs 233 crore in Q3FY2019, driven by NIM rising 83% to Rs 668 crore, while fee income also surged 277% to Rs 113 crore. The operating expenses moved up 275% to Rs 210 crore, while credit cost jumped 112% to Rs 248 crore in Q3FY2019. The net interest margins of the rural business were healthy at 11.64% in Q3FY2019 compared with 10.67% in Q3FY2018.

The rural business loan book jumped 64% to Rs 24122 crore end December 2018. Within the rural finance book, the microfinance loan book moved up 86% to Rs 11592 crore, farm equipment 33% to Rs 7306 crore and two wheeler 75% to Rs 5224 crore end December 2018.

The company has exhibited robust 40% surge in rural business disbursements to Rs 5734 crore in Q3FY2019, driven by two wheelers disbursements rising 93% to Rs 1647 crore, farm equipment 20% to Rs 1291 crore, while the microfinance disbursements have galloped 28% to Rs 2796 crore in Q3FY2019.

Gross Stage 3 assets of rural business have declined to 3.83% and net stage 3 assets to 1.33% end December 2018. The provision coverage ratio improved 66.0% end December 2018.

Housing Finance business: The net profit of housing finance business jumped 62% to Rs 209 crore in Q3FY2019. The Net Interest Income jumped 55% to Rs 319 crore, while fee income declined 19% to Rs 59 crore in housing finance business. However, the credit cost was flat at Rs 51 crore in Q3FY2019.

The disbursement in the housing finance business declined 23% to Rs 2,350 crore. The home loan disbursements surged 57% to Rs 653 crore, but real estate finance disbursements dipped 32% to Rs 1,416 crore and LAP plunged 50% to Rs 281 crore in Q3FY2019.

The housing finance loan book jumped 34% to Rs 23319 crore end December 2018 over December 2017. The real estate finance loan book moved up 46% to Rs 13261 crore and home loan book increased 33% to Rs 5697 crore and LAP rose 7% to Rs 4360 crore end December 2018.

Gross stage 3 assets of housing finance business have eased marginally to 0.95% end December 2018 from 0.97% a quarter ago. The provision coverage ratio increased to 27.0% end December 2018.

Wholesale business: The net profit of wholesale finance business increased 50% to Rs 159 crore in Q3FY2019. The Net Interest Income increased 40% to Rs 295 crore, while fee income declined 34% to Rs 85 crore in wholesale finance business. The credit cost dipped 54% to Rs 112 crore in Q3FY2019.

The disbursement in the wholesale finance declined 44% to Rs 5598 crore in Q3FY2019, as structured corporate finance disbursements fell 13% to Rs 518 crore. The disbursements in the supply chain finance declined 61% to Rs 1020 crore, while debt & capital market segment disbursement plunged 95% to Rs 166 crore and IDF dipped 58% to Rs 330 crore in Q3FY2019. However, the infrastructure finance disbursements increased 40% to Rs 3564 crore.

The wholesale finance loan book increased 5% to Rs 46267 crore end December 2018 over December 2017. The infrastructure finance loan book moved up 9% to Rs 27180 crore and structured corporate finance 2% to Rs 7479 crore and IDF 33% to Rs 7990 crore. However, the debt capital market book declined 2% to Rs 3617 crore and supply chain finance loan book dipped to nil end December 2018.

The gross stage 3 assets of wholesale finance business eased to 10.92% end December 2018 from 12.06% a quarter ago. The provision coverage ratio moved up 64.0% end December 2018.

Book value per share of the company stood at Rs 64.99 per share at end December 2018. Adjusted book value (net of NNPA) per share of the company stood at Rs 53.66 per share at end December 2018.

YTD Financial Performance

The consolidated income from operations increased 29% to Rs 9438.25 crore for the nine-months ended December 2018, while other income of the company jumped 114% to Rs 596.85 crore. The total income increased 32% to Rs 10035.10 crore for 9MFY2019. Interest expenses increased 26% to Rs 5027.52 crore. Operating expenses increased 56% to Rs 1450.09 crore, allowing the operating profits to improve 34% at Rs 3557.49 crore. The cost-to-income ratio rose to 24.1% in 9MFY19 from 23.4% in 9MFY18. Depreciation declined 8% to Rs 35.76 crore, while provisions fell 21% to Rs 1219.10 crore. Profit before tax surged 113% yoy basis at Rs 2302.63 crore. Effective tax rate increased to 27% in 9MFY2019 from 6.7% in 9MFY2018. Net Profit of the company, after share in profit of associates and non-controlling interest, improved 73% to Rs 1678.72 crore for 9MFY2018.