The net profit for the lending business declined 15% to Rs 462 crore in Q4FY2020, driven by 30% dip in rural business net profit to Rs 175 crore. Housing Finance business net profit declined 55% to Rs 102 crore, while the infrastructure finance net profit gained 192% to Rs 140 crore and IDF jumped 200% to Rs 45 crore. However, the defocused business segment registered loss of Rs 70 crore in Q4FY2020.

The consolidated income from operations of the company increased 1% to Rs 3427.22 crore for the quarter ended March 2020, as interest income moved up 7% to Rs 3280.05 crore. Other income dipped 55% to Rs 147.17 crore for quarter ended March 2020.

Interest expenses declined 2% to Rs 1803.14 crore. Net Interest Income increased 20% to Rs 1476.91 crore. Operating expenses rose 1% to Rs 644.69 crore, allowing the operating profits to improve 7% at Rs 979.39 crore. The cost-to-income ratio jumped to 30.1% in Q4FY2020 from 25.0% in Q4FY2019.

Depreciation jumped 55% to Rs 21.47 crore, while provisions galloped 231% to Rs 501.98 crore. Profit before tax declined 39% yoy basis at Rs 455.94 crore for quarter ended March 2020. The tax provisions dipped 64% to Rs 71.08 crore in Q4FY2020. Net Profit of the company, after share in profit of associates and non-controlling interest, declined 29% to Rs 386.15 crore for quarter ended March 2020.

Business performance

Loans and Advances declined 1% to Rs 98384 crore at end March 2020 as compared to Rs 99121 crore at end March 2019. Loans & Advances in the focused businesses rose 5% to Rs 93154 crore at end March 2020 compared with Rs 88756 crore at end March 2019. In the de-emphasized portfolio, the loans & advances dipped 50% to Rs 5230 crore end March 2020.

The company has posted 36% decline in loan disbursements to Rs 8213 crore in Q4FY2020. The disbursements in the focused businesses fell 34%, as the disbursements of the infrastructure finance segment declined 59% to Rs 1891 crore in Q4FY2020. The rural business disbursements also fell 8% to Rs 4420 crore and housing finance business dipped 38% to Rs 1902 crore in Q4FY2020.

In the Investment Management business, Average Assets under Management (AAUM) was flat at Rs 71056 crore in Q4FY20 from Rs 70944 crore in Q4FY19.

Gross Stage 3 assets of the company have declined to 5.36% end March 2020 from 5.94% a quarter ago and 5.90% a year ago, while the Net State 3 assets have eased to 2.28% from 2.67% a quarter ago and 2.40% a year ago. The provision coverage ratio improved to 59% from 57% a quarter ago, while eased from 61.00% a year ago.

Rural business: Rural Business net profit has declined 30% to Rs 175 crore in Q4FY2020. Net interest income increased 16% to Rs 852 crore, while Fee Income rose 4% to Rs 94 crore. The operating expenses moved up 36% to Rs 302 crore, while credit cost jumped to Rs 435 crore including covid related provisions of Rs 57 crore in Q4FY2020. The net interest margins of the rural business were healthy at 12.35% in Q4FY2020 compared with 11.97% in Q4FY2019.

The rural business loan book increased 8% to Rs 27661 crore end March 2020. Within the rural finance book, the microfinance loan book was flat at Rs 12495 crore, while farm equipment moved up 15% to Rs 8438 crore and two wheeler 15% to Rs 6575 crore end March 2020.

The company has exhibited robust 8% decline in rural business disbursements to Rs 4420 crore in Q4FY2020, driven by two wheelers disbursements declining 5% to Rs 1203 crore and microfinance 18% to Rs 2216 crore, while the farm equipment disbursements rose 5% to Rs 890 crore in Q4FY2020.

Gross Stage 3 assets of rural business have rose to 3.78% and net stage 3 assets dipped to 0.89% end March 2020. The provision coverage ratio improved 77% end March 2020.

Housing Finance business: The net profit of housing finance business dipped 55% to Rs 102 crore in Q4FY2020. The Net Interest Income fell 9% to Rs 317 crore, while fee income dipped 38% to Rs 39 crore in housing finance business. However, the credit cost moved up to Rs 156 crore including covid related provisions of Rs 133 crore in Q4FY2020.

The disbursement in the housing finance business declined 38% to Rs 1,902 crore, driven by home loan disbursements declining 26% to Rs 594 crore, while real estate finance disbursements fell 41% to Rs 1,197 crore and LAP dipped 51% to Rs 111 crore in Q4FY2020.

The housing finance loan book rose 4% to Rs 26584 crore end March 2020 over March 2019. The real estate finance loan book declined 1% to Rs 14933 crore and LAP fell 9% to Rs 3881 crore, while home loan book increased 24% to Rs 7770 crore end March 2020.

Gross stage 3 assets of housing finance business rose marginally to 0.97% end March 2020 from 0.88% a quarter ago. The provision coverage ratio increased to 31% end March 2020.

Infrastructure finance business: The net profit of Infrastructure finance business increased 194% to Rs 185 crore in Q4FY2020. The Net Interest Income jumped 82% to Rs 251 crore, while fee income declined 29% to Rs 74 crore in Infrastructure finance business. The credit cost rose to Rs 70 crore including covid related provisions of Rs 17 crore in Q4FY2020.

The disbursement in the wholesale finance declined 59% to Rs 1,891 crore, as infrastructure finance disbursements declined 56% to Rs 1,885 crore and IDF 98% to Rs 6 crore in Q4FY2020.

The wholesale finance loan book increased 3% to Rs 38909 crore end March 2020 over March 2019. The infrastructure finance loan book moved up 2% to Rs 30113 crore and IDF 7% to Rs 8796 crore end March 2020.

The gross stage 3 assets of Infrastructure finance business eased to 9.02% end March 2020 from 9.05% a quarter ago. The provision coverage ratio moved up 60.00% end March 2020.

Book value per share of the company stood at Rs 75.64 per share at end March 2020. Adjusted book value (net of NNPA) per share of the company stood at Rs 65.3 per share at end March 2020.

Financial Performance FY2020

The consolidated income from operations increased 14% to Rs 13244.74 crore for the year ended March 2020, while other income of the company dipped 22% to Rs 1303.39 crore. The total income declined 9% to Rs 14548.13 crore for FY2020. Interest expenses increased 10% to Rs 7513.60 crore. Operating expenses declined 14% to Rs 2278.67 crore, allowing the operating profits to improve 25% at Rs 4755.86 crore. The cost-to-income ratio rose to 25.3% in FY2020 from 24.1% in FY2019. Depreciation jumped 64% to Rs 81.59 crore, while provisions zoomed 185% to Rs 1994.19 crore. Profit before tax declined 12% yoy basis at Rs 2680.08 crore. Effective tax rate increased to 37% in FY2020 from 26.9% in FY2019. Net Profit of the company, after share in profit of associates and non-controlling interest, declined 24% to Rs 1700.17 crore for FY2019.