Housing Development Finance Corporation (HDFC) reported a 16.4 percent jump in net profit for the January-March period on Monday, beating Street estimates. In March, the country's largest mortgage lender recorded its highest monthly individual disbursements ever, boosted by demand for home loans and strong loan applications.

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That was in line with what HDFC Chairman Deepak Parekh had indicated earlier in the day. In an exclusive interview with Moneycontrol, Parekh said: "I have, in my 44 years with HDFC, not seen housing demand the way it is today. This is for small, middle-class homes."

He also said that the number of applications had been phenomenal in February and March and "much more than we have ever received".

HDFC saw 37 percent growth in loan disbursements in the year ended March 2022, on the back of its record individual disbursements in the last month, according to a statement.

The company reported a 13.2 percent year-on-year increase in net interest income – the difference between interest earned and interest paid. The top line also came in ahead of analysts' expectations.

HDFC shares built on to the day's gains after the earnings announcement, closing with a gain of 1.6 percent at Rs 2,262.7 apiece on BSE. During the session, the stock rose as much as 1.9 percent.

HDFC CEO Keki Mistry said that upon the merger of the company with HDFC Bank, the arms and associates of the mortgage lender will be subsidiaries of the bank. HDFC Bank shares ended 1.3 percent higher at Rs 1,403.1 apiece.

Last month, HDFC with HDFC Bank announced a plan to merge their operations to create one of the largest lenders in the world.

Mistry said the merger makes sense now with the changed regulatory environment and will benefit the shareholders of both companies.

HDFC reported an improvement in asset quality. As a percentage of total loans, its gross non-performing assets (NPAs) fell by 41 basis points sequentially to 1.91 percent – the lowest in five quarters. The non-individual gross NPAs declined by 28 basis points to 4.76 percent, according to the filing.

The HDFC board recommended a final dividend of Rs 30 per share.

In terms of interest rate hikes, Mistry said, "My expectation is that during the course of the current financial year – upto march of 2023 – Reserve Bank of India (RBI) would probably bring 2-3 rate hikes of 25 basis points (bps) each."

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First Published:May 2, 2022 2:49 PM IST