The net profit for the lending business surged 67% to Rs 617 crore in Q2FY2019, driven by 88% jump in rural business net profit to Rs 218 crore. Housing Finance business net profit zoomed 84% to Rs 197 crore, while the wholesale finance net profit also moved up 37% to Rs 202 crore.

The consolidated income from operations increased 25% to Rs 3246.30 crore for the quarter ended September 2018, while other income of the company jumped 517% to Rs 79.74 crore. The total income increased 27% to Rs 3326.04 crore for quarter ended September 2018.

Interest expenses increased 26% to Rs 1649.69 crore. Operating expenses increased 16% to Rs 716.02 crore, allowing the operating profits to improve 41% at Rs 960.33 crore. The cost-to-income ratio increased to 23.9% in Q2FY19 from 21.0% in Q2FY18.

Depreciation declined 4% to Rs 11.76 crore, while provisions fell 53% to Rs 150.93 crore. Profit before tax surged 130% yoy basis at Rs 797.64 crore for quarter ended September 2018. Effective tax rate increased to 29.9% in quarter ended September 2018 from 0.4% in the corresponding quarter of previous year. Net Profit of the company, after share in profit of associates and non-controlling interest, improved 66% to Rs 560.41 crore for quarter ended September 2018.

Business performance

Loans and Advances grew 24% to Rs 91201 crore at end September 2018 as compared to Rs 73487 crore at end September 2017. Loans & Advances in the focused businesses moved up 26% to Rs 90026 crore at end September 2018 compared with Rs 67327 crore at end September 2017. In the de-emphasized portfolio, the loans & advances dipped 44%.

The company has posted moderate 9% growth in loan disbursements to Rs 16736 crore in Q2FY2019, driven by rural business showing strong 59% surge disbursements to Rs 4709 crore, while the disbursements of housing finance business were flat at Rs 2584 crore. However, the wholesale business disbursements declined 3% to Rs 9443 crore in Q2FY2019.

In the Investment Management business, Average Assets under Management (AAUM) surged by 40% to Rs 73754 crore as compared to Rs 52749 crore at end September 2017.

In the Wealth Management business, the Average Assets under Service (AAUS) went up by 27% from Rs 21065 crore to Rs 16596 crore.

Asset Quality

Gross Stage 3 assets of the company have declined to 7.1% end September 2018 from 7.93% a quarter ago and 10.95% a year ago, while the Net State 3 assets have eased to 2.79% from 3.17% a quarter ago and 5.4% a year ago. The provision coverage ratio improved to 62% from 54% a year ago.

Rural business: Rural Business net profit has increased 88% to Rs 218 crore in Q2FY2019, driven by NIM rising 106% to Rs 605 crore, while Fee Income also surged 476% to Rs 98 crore. The operating expenses moved up 291% to Rs 176 crore, while credit cost jumped 137% to Rs 216 crore in Q2FY2019. The net interest margins of the rural business were healthy at 11.84% in Q2FY2019 compared with 9.97% in Q2FY2018.

The rural business loan book jumped 71% to Rs 21433 crore end September 2018. Within the rural finance book, the microfinance loan book moved up 115% to Rs 10425 crore, farm equipment 33% to Rs 6736 crore and two wheeler 66% to Rs 4272 crore end September 2018.

The company has exhibited robust 59% surge in rural business disbursements to Rs 4709 crore in Q2FY2019, driven by two wheelers disbursements rising 50% to Rs 1107 crore, farm equipment 29% to Rs 812 crore, while the microfinance disbursements have galloped 74% to Rs 2790 crore in Q2FY2019.

Gross Stage 3 assets of rural business have declined to 4.29% and net stage 3 assets to 1.5% end September 2018. The provision coverage ratio improved 66% end September 2018.

Housing Finance business: The net profit of housing finance business jumped 84% to Rs 197 crore in Q2FY2019. The Net Interest Income jumped 51% to Rs 289 crore, while fee income galloped 42% to Rs 64 crore in housing finance business. However, the credit cost also declined 13% to Rs 34 crore in Q2FY2019.

The disbursement in the housing finance business were flat at Rs 2584 crore, driven by home loan disbursements rising 57% to Rs 610 crore, while real estate finance disbursements fell 4% to Rs 1632 crore and LPA dipped 33% to Rs 341 crore in Q2FY2019.

The housing finance loan book jumped 40% to Rs 21718 crore end September 2018 over September 2017. The real estate finance loan book moved up 62% to Rs 12151 crore and home loan book increased 27% to Rs 5268 crore and LAP rose 11% to Rs 4300 crore end September 2018.

Gross stage 3 assets of housing finance business have eased marginally to 0.97% end September 2018 from 0.99% a quarter ago. The provision coverage ratio increased to 26% end September 2018.

Wholesale business: The net profit of wholesale finance business increased 37% to Rs 202 crore in Q2FY2019. The Net Interest Income fell 2% to Rs 251 crore, while fee income moved rose 1% to Rs 166 crore in wholesale finance business. The credit cost dipped 72% to Rs 90 crore in Q2FY2019.

The disbursement in the wholesale finance declined 3% to Rs 9443 crore, as infrastructure finance disbursements declined 12% to Rs 3136 crore, while structured corporate finance disbursements also fell 58% to Rs 561 crore in Q2FY2019. The disbursements in the supply chain finance declined 46% to Rs 1391 crore, while debt & capital market segment disbursement jumped 113% to Rs 3648 crore and IDF 24% to Rs 707 crore in Q2FY2019.

The wholesale finance loan book increased 8% to Rs 46875 crore end September 2018 over September 2017. The infrastructure finance loan book moved up 6% to Rs 27026 crore and structured corporate finance 7% to Rs 7589 crore, debt capital market 3% to Rs 3694 crore and IDF 50% to Rs 7825 crore, while supply chain finance loan book declined 63% to Rs 740 crore end September 2018.

The gross stage 3 assets of wholesale finance business eased to 10.91% end September 2018 from 12.06% a quarter ago. The provision coverage ratio moved up 64% end September 2018.

Book value per share of the company stood at Rs 61.67 per share at end September 2018.

Half Yearly Financial Performance

The consolidated income from operations increased 29% to Rs 6334.14 crore for the half year ended September 2018, while other income of the company jumped 633% to Rs 144.57 crore. The total income increased 31% to Rs 6478.71 crore for H1FY2019. Interest expenses increased 22% to Rs 3162.86 crore. Operating expenses increased 22% to Rs 146.15 crore, allowing the operating profits to improve 60% at Rs 1847.70 crore. The cost-to-income ratio was steady at 23.6% in H1FY19 from 23.4% in H1FY18. Depreciation declined 10% to Rs 23.42 crore, while provisions fell 30% to Rs 297.46 crore. Profit before tax surged 117% yoy basis at Rs 1526.82 crore. Effective tax rate increased to 28.02% in H1FY2019 from 3.09% in H1FY2018. Net Profit of the company, after share in profit of associates and non-controlling interest, improved 69% to Rs 1098.79 crore for H1FY2018.