Mortgage lender Housing Development Finance Corporation (HDFC) is likely to post 12-22% fall in its March quarter profit on the back of a likely dip in dividend earnings from its subsidiaries. The non-banking financial company (NBFC) arm of private sector lender HDFC Bank will announce its quarterly results on Monday (May 25).
Brokerage firm Kotak Institutional Equities expects HDFC to report a 21.30% dip in its profit on a 7.30% rise in net interest income (NII), as cited by the Economic Times. The brokerage also highlighted that the NBFC may not make any capital gain or dividend income.
"Unlike Q4FY19 when the company earned Rs 540 crore as dividend income, its subsidiaries have not paid any dividend to parent in Q4FY20," the brokerage firm said as quoted by the news daily.
Kotak also expects HDFC to post an AUM (assets under management) growth of 13% y-o-y (year-on-year), slightly lower than 14% it delivered in Q3 of FY20, owing to lower outlay in the last 15 days of the quarter. Core NIMs (net interest margin) are expected to soften to 2.40% from 2.50% on quarter-on-quarter (Q-o-Q) basis, reflecting the latest drop in home loan rates.
Meanwhile, Motilal Oswal Financial Services expects a 12% fall in HDFC's net profit at Rs 2,520.70 crore, with a 6.80% increase in NII (net interest income) at Rs 3,377.40 crore during the March quarter, the news report added.