The net profit for the lending business surged 30% to Rs 665 crore in Q3FY2020, driven by 24% jump in rural business net profit to Rs 290 crore. Housing Finance business net profit declined 3% to Rs 203 crore, while the infrastructure finance net profit gained 146% to Rs 172 crore. However, the defocused business segment registered loss of Rs 92 crore in Q3FY2020.

The consolidated income from operations of the company increased 8% to Rs 3735.79 crore for the quarter ended December 2019, as interest income moved up 9% to Rs 3294.38 crore. Other income rose 6% to Rs 378.25 crore for quarter ended December 2019.

Interest expenses rose 1% to Rs 1889.57 crore. Net Interest Income increased 20% to Rs 1467.97 crore. Operating expenses increased 12% to Rs 501.42 crore, allowing the operating profits to improve 19% at Rs 1344.80 crore. The cost-to-income ratio eased to 27.2% in Q3FY2020 from 28.4% in Q3FY2019.

Depreciation jumped 131% to Rs 28.46 crore, while provisions galloped 73% to Rs 591.12 crore. Profit before tax declined 7% yoy basis at Rs 725.22 crore for quarter ended December 2019. The tax provisions dipped 31% to Rs 133.75 crore in Q3FY2020. Net Profit of the company, after share in profit of associates and non-controlling interest, rose 2% to Rs 591.03 crore for quarter ended December 2019.

Business performance

Loans and Advances grew 5% to Rs 99453 crore at end December 2019 as compared to Rs 94711 crore at end December 2018. Loans & Advances in the focused businesses moved up 14% to Rs 93956 crore at end December 2019 compared with Rs 82612 crore at end December 2018. In the de-emphasized portfolio, the loans & advances dipped 55% to Rs 5497 crore end December 2019.

The company has posted 30% decline in loan disbursements to Rs 9561 crore in Q3FY2020. The disbursements in the focused businesses fell 20%, as the disbursements of the infrastructure finance segment declined 47% to Rs 2069 crore in Q3FY2020. The rural business disbursements also fell 5% to Rs 5468 crore and housing finance business dipped 14% to Rs 2024 crore in Q3FY2020.

In the Investment Management business, Average Assets under Management (AAUM) has increased 4% to Rs 71587 crore in Q3FY20 from Rs 69080 crore in Q3FY19.

In the Wealth Management business, Assets under Service (AUS) has increased 11% to Rs 25405 crore in Q3FY20 from Rs 22887 crore in Q3FY19.

Gross Stage 3 assets of the company have declined to 5.94% end December 2019 from 5.98% a quarter ago and 6.74% a year ago, while the Net State 3 assets have eased to 2.67% from 2.83% a quarter ago and 2.64% a year ago. The provision coverage ratio was lower at 57.00% from 62.00% a year ago.

Rural business: Rural Business net profit has increased 24% to Rs 290 crore in Q3FY2020, driven by NIM rising 23% to Rs 821 crore, while Fee Income rose 7% to Rs 121 crore. The operating expenses moved up 41% to Rs 296 crore, while credit cost increased 11% to Rs 276 crore in Q3FY2020. The net interest margins of the rural business were healthy at 11.90% in Q3FY2020 compared with 11.64% in Q3FY2019.

The rural business loan book jumped 14% to Rs 27594 crore end December 2019. Within the rural finance book, the microfinance loan book moved up 11% to Rs 12889 crore, farm equipment 13% to Rs 8240 crore and two wheeler 23% to Rs 6423 crore end December 2019.

The company has exhibited robust 5% decline in rural business disbursements to Rs 5468 crore in Q3FY2020, driven by two wheelers disbursements declining 9% to Rs 1495 crore and microfinance disbursements 8% to Rs 2,561 crore in Q3FY2020. On the other hand, the farm equipment disbursements rose 6% to Rs 1370 crore,

Gross Stage 3 assets of rural business have declined to 3.59% and net stage 3 assets to 1.26% end December 2019. The provision coverage ratio improved 66.0% end December 2019.

Housing Finance business: The net profit of housing finance business declined 3% to Rs 203 crore in Q3FY2020. The Net Interest Income rose 8% to Rs 343 crore, while fee income moved up 12% to Rs 66 crore in housing finance business. However, the credit cost increased 41% to Rs 72 crore in Q3FY2020.

The disbursement in the housing finance business declined 14% to Rs 2,024 crore, driven by 18% decline in real estate finance disbursements to Rs 1168 crore and LAP 47% to Rs 150 crore in Q3FY2020. Home loan disbursements have increased 8% to Rs 706 crore.

The housing finance loan book increased 14% to Rs 26689 crore end December 2019 over December 2018. The real estate finance loan book moved up 15% to Rs 15215 crore and home loan book increased 31% to Rs 7459 crore and LAP declined 8% to Rs 4015 crore end December 2019.

Gross stage 3 assets of housing finance business have rose marginally to 0.88% end December 2019 from 0.79% a quarter ago. The provision coverage ratio eased to 28.0% end December 2019.

Infrastructure finance business: The net profit of Infrastructure finance business increased 146% to Rs 172 crore in Q3FY2020. The Net Interest Income jumped 29% to Rs 242 crore, while fee income moved up 28% to Rs 92 crore in Infrastructure finance business. The credit cost dipped 26% to Rs 97 crore in Q3FY2020.

The disbursement in the wholesale finance declined 47% to Rs 2,069 crore, as infrastructure finance disbursements declined 59% to Rs 1,445 crore, while and IDF surged 89% to Rs 624 crore in Q3FY2020.

The wholesale finance loan book increased 13% to Rs 39674 crore end December 2019 over December 2018. The infrastructure finance loan book moved up 13% to Rs 30684 crore and IDF 13% to Rs 8990 crore end December 2019.

The gross stage 3 assets of Infrastructure finance business eased to 9.05% end December 2019 from 9.24% a quarter ago. The provision coverage ratio stood at 57.0% end December 2019.

Book value per share of the company stood at Rs 73.0 per share at end December 2019. Adjusted book value (net of NNPA) per share of the company stood at Rs 60.7 per share at end December 2019.

YTD Financial Performance

The consolidated income from operations increased 12% to Rs 10836.49 crore for the nine-months ended December 2019, while other income of the company jumped 30% to Rs 300.65 crore. The total income increased 12% to Rs 11137.14 crore for 9MFY2020. Interest expenses increased 14% to Rs 5710.46 crore. Operating expenses declined 4% to Rs 1392.31 crore, allowing the operating profits to improve 17% at Rs 4034.37 crore. The cost-to-income ratio dipped to 25.7% in 9MFY2020 from 29.7% in 9MFY2019. Depreciation jumped 68% to Rs 60.12 crore, while provisions galloped 59% to Rs 1750.11 crore. Profit before tax declined 3% yoy basis at Rs 2224.14 crore. Effective tax rate increased to 41% in 9MFY2020 from 27.0% in 9MFY2019. Net Profit of the company, after share in profit of associates and non-controlling interest, fell 22% to Rs 1314.02 crore for 9MFY2019.