HDFC Ltd and Tata Motors Ltd - Q2 Results

Here is a quick look at the finer points of 2 large cap companies that announced their second quarter results on 01-November; HDFC and Tata Motors.
 

HDFC Ltd – Q2 Results

For the second quarter ended Sep-21, HDFC reported 13.23% growth in revenues at Rs.38,591 crore. This is consolidated including the insurance and asset management businesses too. Growth in the revenues was driven by the life insurance and general insurance business while the home finance core lending business grew just 4.3% as lower rates put pressure on the stock.

Net interest income or NII of the home finance business grew by 17% at Rs.8,255 crore. While the  spreads stood at 2.29%, the net interest margin or NIM was 3.6%. HDFC focuses on the low cost housing segment quite aggressively and for the first half, low cost housing disbursals grew 80%; accounting for 30% of new loans in volumes and 14% in value. 

HDFC Ltd made a net profit of Rs.5,258 crore for the quarter, up 14.3% on a YoY basis. The big thrust to operating profit of 32.3% came from the  lending business. While life and general insurance saw top line growth, their operating profits were flat to lower due to surge in claims paid out and higher provisions. 

The net profit margins at 13.63% was better than 13.50% in the Sep-20 quarter. This was helped by the cost to income ratio down from 8.5% to 8.2%. Capital adequacy was comfortable at 22.4%.

Tata Motors – Q2 Results

Tata Motors sales revenues were up 14.66% in the Sep-21 quarter at Rs.61,379 crore. This is the consolidated revenues from Tata Motors India and from JLR UK. The JLR wholesale sales were down -12.8% at 64,032 units and retails were down -18.4% at 92,710 units with pressure visible across most of the global markets.

The bottom line dipped into a net loss largely due to reasons like the microchip shortage, input inflation and inventory shortfalls. India domestic business of Tata Motors saw 77% volume growth at 1,62,400 units, while the order book of Jaguar Land Rover remained robust at a record 125,000 units.

Net loss for Sep-21 quarter at Rs-4,442cr was flat sequentially. JLR saw EBITDA margins fall by 380 bps to 7.3% while TML saw EBITDA margins improve by 130 bps to 3.9%. This translated into overall EBITDA margins of 8.4% for the quarter. On the positive side, the aggressive debt reduction program of TAMI has resulted in the debt/equity ratio of Tata Motors coming down from 1.78 to 1.52 levels on a year-on-year basis.