HDB Financial Services (HDBFS) Q4 20/21 earnings summary

Executive summary

• FY21 revenue rose to ₹10,944.78 crore from ₹10,756.47 crore, while profit after tax fell to ₹391.47 crore from ₹1,004.85 crore amid sharply higher impairment costs.

• AUM reached ₹61,560.67 crore, up from ₹58,832.75 crore; loan disbursements were ₹24,990 crore versus ₹29,853 crore in FY20.

• Operations faced pandemic-related economic and asset-quality pressure; the FY22 outlook was cautiously optimistic, with recovery expected to strengthen in H2.

Financial highlights

• Total revenue was ₹10,944.78 crore versus ₹10,756.47 crore; profit before tax was ₹500.71 crore versus ₹1,464.48 crore.

• Net income was ₹391.47 crore versus ₹1,004.85 crore; basic and diluted EPS were ₹4.97, down from ₹12.78 and ₹12.77, respectively.

• Total expenses rose to ₹10,444.07 crore from ₹9,291.99 crore, driven in part by impairment expense of ₹3,068.77 crore versus ₹1,441.57 crore.

• Interest income was ₹8,487.88 crore versus ₹8,233.47 crore; finance costs declined to ₹3,882.93 crore from ₹4,081.42 crore.

• Total assets reached ₹62,641.06 crore from ₹60,714.46 crore; shareholders’ funds were ₹8,446.24 crore versus ₹8,017.80 crore.

Outlook and guidance

• FY22 outlook was cautiously optimistic, supported by distribution reach and workforce; customer acquisition and engagement were expected to adapt to the post-COVID economy.

• FY22 was expected to be a two-half recovery: H1 growth largely optical amid second-wave restrictions, with broader economic recovery anticipated in H2.

• Industry projections cited India GDP growth of 12.5% in 2021 by IMF and 11% in FY22 by CRISIL, following an estimated 8% FY21 contraction by CRISIL.