HDFC slipped into the red no sooner its Q3 results hit the market on Tuesday, but recovered thereafter to move back to positive.

In fact, by 13:13 IST, the scrip of the housing finance major edged up 0.75% to Rs 376.20. This came after it hit the day's low of Rs 373.15 . The scrip made good headway ahead of the results today - up as much as 1.7% to Rs 379.85 earlier. Volumes on the counter were thin, at 8,100 shares on BSE so far.

HDFC is currently trading at its lifetime high. It got a recent boost after the Kelkar Committee, in its final report on 27 December 2002, suggested that tax sops for the housing finance segment should be continued, albeit in a diluted form. The panel recommended reduction in rebate on interest payment on housing loans from Rs 1,50,000 to Rs 50,000. It also recommended a 2% interest subsidy on housing loans up to Rs 5,00,000.

For Q3 ended 31 December 2002, the housing finance major reported a 21.1% growth in net profit to Rs 146.65 crore (Rs 1.46 billion) compared to Rs 121.01 crore (Rs 12.1 billion) in the quarter ended 31 December 2001 (DQ-01). Total income increased from Rs 666.28 crore (Rs 6.66 billion) in DQ-01 to Rs 740.13 crore in DQ-02, recording a growth of 11%. Income from operations climbed 10.89% from Rs 665.22 crore (Rs 6.65 billion) to Rs 737.64 crore (Rs 7.37 billion).

Net profit was in line with expectations. As per a capitalmarket.com poll, analysts had forecast a rise of 16.5% to 28% in net profit to between Rs 141 crore (Rs 1.41 billion) and Rs 155 crore (Rs 1.55 billion) for DQ 2002 as against Rs 121.01 crore in DQ 2001. The poll had forecast a between 11% to 24% rise in HDFC's net interest income to between Rs 203 crore (Rs 2.03 billion) and Rs 227 crore (Rs 2.27 billion) compared to Rs 183.40 crore (Rs 1.83 billion) in DQ 2001.

HDFC's results reflect a sustained rise in demand for housing loans on the back of lower interest rates, which also attract tax benefits.

Approvals during the nine-month period ended 31 December 2002 aggregated Rs 8004.82 crore (Rs 80.04 billion) compared to Rs 6137.19 crore (Rs 61.37 billion) during the corresponding period in the previous year - representing an increase of 30%. Disbursements during this period amounted to Rs 6491.46 crore (Rs 64.91 billion) compared to Rs 4951.75 crore (Rs 49.51 billion) during the corresponding period in the previous year, representing an increase of 31%.

During the nine months ended 31 December 2002, growth in individual loan approvals and disbursements was 36% and 37% respectively, compared to the corresponding period in the previous year.

The loan portfolio, inclusive of investment in preference shares and debentures for financing real estate projects, as on 31 December 2002 amounted to Rs 21,184 crore (Rs 211.84 billion) representing an increase of 25% compared to the corresponding figure as on 31 December 2001.

HDFC, a few weeks ago, announced a 25 basis points cut in its retail prime lending rate to 10.25% from 10.50%. It also reduced interest rates on its fixed rate loans for various tenures. HDFC attributed the cut in lending rates to a reduction in cost of funds. It has effected a 275 basis points reduction in deposit rates since April 2001.

Recently, HDFC announced that it had sold its entire stake in Spectramind, Bermuda, in favour of Wipro for Rs 26.40 crore. With this, Spectramind has become a wholly-owned subsidiary of Wipro.

Meanwhile, HDFC's board of directors today approved to undertake a new activity of carrying on the business of insurance broker and agent and, in this connection, approved the making of an application to the Insurance Regulatory and Development Authority for obtaining a Composite Corporate Agency.

BSE Code: 500010