HDB Financial Services (HDBFS) is a leading Non-Banking Financial Company (NBFC) that caters to the growing needs of an aspirational India, serving both individual & business clients. Incorporated in 2007, HDBFS is a well-established business with strong capitalization. HDBFS is accredited with CARE AAA & CRISIL AAA ratings for its long-term debt & Bank facilities and an A1+ rating for its short-term debt & commercial papers, making it a strong and reliable financial institution. Their line of business includes – Lending and BPO Services.
It issues various instruments including Term Loans, Line of Credits, Non-Convertible Debentures, External Commercial Borrowings and other market instruments. The Company has a diversified mix of investors which includes Banks, Mutual Funds, Insurance companies, Foreign Institutional Investors, Corporates, Provident Funds etc.
Lending: They offer a wide range of secured and unsecured loans to our customers. Also provide a one-stop-shop for all requirements, be it loans, investments or protection. They have quickly grown to have more than 1,492 branches spread across 24 States & 3 Union Territories.
BPO services division delivers back-office services such as forms processing, documents verification, finance and accounting services and correspondence management. They also deliver front office services such as contact center management, outbound marketing and collection services. HDB Financial Services Limited is a subsidiary company of HDFC Bank.
For NBFCs in upcoming years, it is expected to see a gradual and sustained improvement in their business. Sectors which have been laggards in revenue recovery are expected to pick up the pace such as airlines, hospitality, BFSI, IT, Infrastructures etc. Asset quality may pose a challenge for some NBFCs, which is determined by the behavior of their restructured book.
For any financial firm it is important to focus on their liquidity & mitigate the threat that arises from it. HDBFS managed to do so by maintaining their average LCR (Liquidity Coverage Ratio) for the quarter ended 30th June 2023 – 199.33% as against 168.22% for the quarter ended 31st March 2023 which is well above present prescribed minimum requirement of 70%.
| Particulars | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 |
|---|---|---|---|---|---|
| Total Revenue | 12,402.88 | 11,306.29 | 10,944.78 | 10,756.47 | 8,724.81 |
| PBT | 2,627.40 | 1,347.56 | 500.71 | 1,464.48 | 1,724.06 |
| PAT | 1,959.35 | 1,011.40 | 391.47 | 1,004.85 | 1,153.24 |
| AUM | 70,084 | 61,444 | 61,561.00 | 58,833.00 | 55,245.00 |
| Shareholder’s Fund | 11,437 | 9,539.73 | 8,446.24 | 8,017.80 | 7,178.48 |
| Borrowings | 54,865 | 48,973.08 | 50,358.75 | 49,804.05 | 45,105.10 |
| EPS | 24.78 | 12.81 | 4.97 | 12.78 | 14.71 |
| Book value per share | 144.52 | 120.69 | 107.02 | 101.8 | 91.36 |
| Particulars | H1 2024 | H1 2023 | Q2 2024 | Q1 2024 |
|---|---|---|---|---|
| Total Revenue | 6,902.5 | 6,028 | 3,515.7 | 3,386.8 |
| PBT | 1,567.3 | 1,223.2 | 806.8 | 760.5 |
| PAT | 1,167.8 | 912.4 | 600.8 | 567 |
| Debt Equity Ratio | 5.41 | 5.48 | 5.41 | 5.38 |
| Current Ratio | 1.28 | 1.12 | 1.28 | 1.17 |
| Profit Margin % | 16.92 | 15.14 | 17.09 | 16.74 |
| EPS | 14.75 | 11.74 | 7.59 | 7.16 |
During this half yearly performance, Revenue mainly generated from interest income segment which contributes around 75% ~ INR 5,243.8 crore of total income INR 6,902.5 crore. It also registered a significant increase of 15% on YoY basis (H1’24 & H1’23) & 3% elevation on QoQ basis (Q2’24 & Q1’24).
The NBFC industry is well positioned to contribute to the India’s growth & very recently were acknowledged by the RBI governor for their pivotal contribution in delivering credit to unbanked and underserved areas. The NBFC industry scope involves complementing and sometimes even substituting banks by widening the ambit and access to financial services. The increased credit availability has been a major factor in driving the enterprise in the country. Technology too played a significant role and has been a key enabler across the industry, largely enhancing user experience and easing out the whole process. With growing economy & government schemes for expanding the financial inclusivity is well poised for further growth of the NBFCs.
NBFCs need to remain alert to avoid any complacency during good times. RBI highlighted the need for further strengthening the governance standards and assurance mechanisms viz. Compliance, Risk management and Internal audit on a regular basis.
The increasing dependencies on bank borrowings can increase risks associated with high credit growth in retail segment mostly in unsecured.
Apart from that prioritising the upgradation of IT systems and cyber security is something needs to be often looked after.
| Name of the Shareholder | No. of Equity Share held | Percentage (%) |
|---|---|---|
| HDFC Bank Ltd | 75,05,96,670 | 94.84 |
| Others | 4,08,02,413 | 5.16 |
| Total (Issued & Paid-up Shares) | 79,13,99,083 | 100 |
Mr. Arijit Basu - Chairman and Non-Executive Director
Mr. G Ramesh Ganesan - Managing Director & Chief Executive Officer
Mr. Jaykumar Shah – Chief Financial Officer
For any queries, reach out to: unlisted@rurashfin.com or Call: +91 224157 1111