HDFC Ltd, India's biggest mortgage lender, reported a 10 percent rise in third-quarter net profit, falling short of market estimates as income from sales of investments fell sharply from a year earlier.
HDFC said net profit rose to 9.81 billion rupees from 8.91 billion a year earlier. Total income rose to 44.73 billion rupees from 33.21 billion.
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HDFC had been expected to post net profit of 10.4 billion rupees, according to Thomson Reuters I/B/E/S.
Profit on the sale of investments fell 47 percent to 879.9 million rupees. Operating profit, excluding the gain from investment sales, rose about 19 percent to 12.40 billion rupees.
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Its loan book size also increased 21 percent to 1.32 trillion rupees as of December 31, slightly more than the 20 percent the company had projected.
"Despite the challenging environment, this is the twenty-eighth consecutive quarter-end at which the percentage of non-performing loans has been lower than the corresponding quarter in the previous year," HDFC said in a statement.
Gross non-performing assets fell marginally to 0.82 percent of the loan portfolio from 0.85 percent a year earlier.
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"Notwithstanding the high interest rates that we are seeing in the system and the general perception or belief that there is a slowdown in the economy and NPLs (non-performing loans) in the banking system will go higher, we have not seen that," Vice-chairman Keki Mistry said in a televised news conference.
HDFC competes with India's top commercial bank, State Bank of India (SBI.NS), No. 2 ICICI Bank (ICBK.NS), and a host of other banks and financial institutions for a share of India's huge mortgage loan market.
Fifteen analysts tracking HDFC have a "buy" or a "strong buy" rating on the stock, while 17 rate it a "hold". Two analysts have a "sell" rating on the shares.
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Shares of HDFC, which has a market capitalisation of about $1.8 billion, rose about 8 percent in 2011. On Thursday, its shares were trading 1.83 percent higher at 693.4 rupees.