Mumbai: Indiabulls Housing Finance said on Friday that its net profit for the quarter ended June dropped 65.5 per cent. However, the company said it expects its loan book to start growing from here on, as it believes the phase of phase of reduction in loan book and AUM (assets under management) is over.
The housing finance company had reported a net profit of Rs 272.5 crore in the quarter, compared with Rs 790 crore in the same period a year ago.
Its revenue from operations dropped by 33.7 per cent to 2,574.6 crore from Rs 3,885 crore a year ago.
The company, which is engaged in providing individual housing loans, loans against property (LAP) and project finance for real estate development, said its operations of all these segments were impacted over the past few years and consequent to COVID 19 pandemic are expected to be further significantly impacted, including erosion in the asset values of the collateral held by it.
The company said it has assessed each of its loan portfolios and performed a comprehensive analysis of the staging of each of its borrower segments, reviewed the project status for project finance loans, and analysed its outstanding exposures viz-a-viz the valuation of the collateral/underlying property based on third party valuation reports.
“Based on the above analysis, the Holding Company has recorded expected credit loss provision to reflect, among other things, an increased risk of deterioration in macro-economic factors caused by COVID-19 pandemic.
It warned that in the event the impact of pandemic is more severe or prolonged than anticipated, it will have a corresponding impact on the carrying value of the financial assets, results of operation and the financial position of the company.
Indiabulls Housing Finance said the phase of reduction in loan book and AUM is over and the loan book will start growing from here on as per the company’s business plan that blends co-origination with banks for retail loans and with funds for developer loans as two important pillars going forward.
It said its gross NPAs have remained moderate at 2.20 per cent, and added that if it had not chosen to de-grow its book in the past 1 year, the Gross NPAs would have been at 1.80 per cent.
Its capital adequacy stands at 27.94 per cent, compared to 27.81 per cent a year ago.
Ahead of the announcement, Indiabulls Housing Finance shares dropped 0.4 per cent to close at Rs 203.10, while benchmark Sensex climbed 0.6 per cent to 38,435 points.
The stock has shed 35 per cent for the year to date, compared to a 6.8 per cent decline in Sensex.