HDFC Nov02 18 PDF

Housing Development Finance
Corporation Limited
1
CONTENTS
• HDFC Snapshot
• Mortgage Market in India
• Operational and Financial Highlights: Mortgages
• Valuation and Shareholding
• Key Subsidiaries and Associates
• Financials FY18: Standalone & Consolidated
2
HDFC SNAPSHOT
3
HDFC Snapshot
• Incorporated in 1977 as the first

WHO WE ARE…
specialised mortgage company in India Market capitalisation*:
• Now a Financial Conglomerate with USD 42 bn
interests beyond mortgages

• 75% shares held by Foreign Investors
21.4% 51.6% 52.8% 50.5%
Market capitalisation*: Market capitalisation*: Market capitalisation*:

US$ 71 bn US$ 10 bn US$ 4 bn
Ranked 1st in total new 3rd largest private player in the
ADRs listed on NYSE business received premium general insurance industry
2nd largest AMC with total AUM of
amongst private life insurance
US$ 40 bn
companies
100% 90.8% 57.9% 100%
HDFC Capital
Advisors
Market capitalisation*:
Financial services distribution India's first dedicated education
company US$ 3 bn Property funds with AUM of
loan company with outstanding ~US$ 2.2 bn; of which US$ 1.1
Sources more than half of HDFC’s loan book of US$ 674 mn
Affordable housing finance bn is committed for
home loans
company development of affordable
housing
*As at October 31, 2018

US$ amounts converted based on exchange rate of US$ 1 = Rs. 72.66 4
HDFC Snapshot
BUSINESS SUMMARY
• Loans Outstanding (Gross loans) : Rs. 4,302.10 bn
(September 30, 2018) : US$ 59.21 bn
• Individual Loans Originated CAGR (5 years) : 18%
• Cumulative Housing Units Financed : 6.6 million
• Total loan write offs since inception : Under 7 basis points

(of cumulative disbursements)
• Cost to Income Ratio* : 9%
• Unaccounted gains on listed investments : Rs. 1,697.44 bn

in subsidiary and associate companies* : US$ 23.36 bn
• Profit After Tax CAGR (5 years) : Standalone - 12%

(FY 2018){excluding exceptional items} : Consolidated - 14%
* As at September 30, 2018 5

MORTGAGE MARKET IN INDIA
6
Mortgage Market in India
DRIVERS OF MORTGAGE GROWTH

• Improved Affordability
• Low Penetration
• Government Incentives
• Fiscal Benefits
• Credit Linked Subsidy Scheme
• Other Demand Drivers

7
IMPROVED AFFORDABILITY
Best affordability in over two decades.
60 16.00
Government support towards housing likely to further improve
affordability. 14.00
50
Property Value (Rs. 100,000) &
Annual Income (Rs. 100,000)

12.00
40
10.00
Affordability
30 8.00
22.0
6.00
20 15.6
11.1
4.00
8.3 6.6
10 5.9 5.3 5.1 4.7 4.3 4.7 5.0 5.1 5.1
4.5 4.7 4.8 4.6 4.7 4.6 4.4 4.1
3.8 3.7 2.00
0 0.00
Property Cost Affordability Annual Income
Representation of property price estimates Affordability equals property prices by annual income
Based on customer data of a large metro city 8

LOW PENETRATION IMPLIES ROOM FOR GROWTH

MORTGAGES AS A PERCENT OF NOMINAL GDP
100%
90%
80%
68%
63%
60% 56%
45%
42%
41%
40% 36%
32%
20% 22%
20%
10%
0%
Source: European Mortgage Federation, HOFINET & HDFC estimates for India 9
GOVERNMENT INITIATIVES
Interest
Fiscal Supply Side
Subvention
Incentives Incentives
Scheme
Interest rate subsidy Incentives to
under the Credit developers to build
Linked Subsidy affordable housing
Scheme (CLSS)
widened to include
Tax incentives on middle-income groups ‘Infrastructure’ status
interest and principal
accorded to affordable
amount for home
housing
loan borrowers Extension of
timeframe and
rationalisation of External Commercial
conditions under the Borrowings/Rupee
CLSS Denominated Bonds
Issued Overseas
10
TAX INCENTIVES & THE CREDIT LINKED SUBSIDY

SCHEME (CLSS) HAVE LOWERED THE EFFECTIVE
RATES ON MORTGAGES
FY 2019 FY 2002 FY 2000
Loan amount (Rs) 2,700,000 2,700,000 2,700,000
Less: Subsidy under CLSS 230,156 - -
Revised loan amount 2,469,844 2,700,000 2,700,000
Nominal Interest Rate(%) 8.85% 10.75% 13.25%
Max deduction for interest allowed 200,000 150,000 75,000

Deduction on principal 150,000 20,000 20,000
Tax rate 30.90% 31.50% 34.50%
Tenor (years) 20 20 20
Total amount paid per year 368,581 321,636 376,812

Interest component 218,581 290,250 357,750
Principal repaid 150,000 31,386 19,062
Tax amount saved 108,150 53,550 32,775
Effective interest paid on home loan 110,431 236,700 324,975
Effective interest on home loan 4.1% 8.8% 12.0%
11
CREDIT LINKED SUBSIDY SCHEME – AN ENABLER

• The Credit Linked Subsidy Scheme (CLSS) is one of the key components under the
government’s flagship programme, ‘Housing for All by 2022.’
• The interest subsidy on the home loan is paid to the beneficiary upfront, thereby reducing the
amount of the equated monthly instalment (EMI).
• The eligible beneficiary family should not own a home,
• Applicable for home loans disbursed after January 1, 2017.
• HDFC ranked as the top performing primary lending institution in the EWS & LIG segment and
the second best in the MIG segment of the CLSS
KEY FEATURES OF THE CLSS SCHEME
Economically Weaker/
Middle Income Group -I Middle Income Group-II
Low Income Group
Household Income p.a. Up to Rs 600,000 Rs > 600,000 up to > Rs 1,200,000 to
(US$ 8,300) 1,200,000 1,800,000
(>US$ 8,300 to 16,500) (>US$ 16,500 to
25,000)
Property size (sq mtrs) 60 160 200
Maximum amount of loan Rs 600,000 Rs 900,000 Rs 1,200,000
qualifying for subsidy (US$ 8,300) (US$ 12,400) (US$ 16,500)
Interest Subsidy (% per annum) 6.50% 4% 3%
Subsidy under CLSS* Rs 267,280 Rs 235,068 Rs 230,156
(US$ 3,700) (US$ 3,200) (US$ 3,170)
*NPV discount rate at 9% for 20 years 12
OTHER DEMAND DRIVERS

• Favourable Demographics: 66% of India’s population is
below 35 years of age, hence large potential for home
loans
• Nuclear Households: Rise in the number of households
with a shift towards nuclear families
• Urbanisation: Currently 32% of the Indian population
reside in cities; estimated to be 50% by 2030
• Interest Rates: Improved affordability through rising
disposable incomes and affordable interest rates on
home loans
13
OPERATIONAL & FINANCIAL
HIGHLIGHTS: MORTGAGES
14
Operational & Financial Highlights: Mortgages
CORE BUSINESS – LENDING

(As at September 30, 2018: Gross Loans - US$ 59 bn)
INDIVIDUAL LOANS Individuals 73%
– Home Loans Corporate 6%
• Fixed rate loans
• Floating rate loans Construction
– Home Improvement
Finance 12%
Loans
– Home Extension Loans
– Home Equity Loans Lease Rental
– Rural Home Loans Discounting 9%
– Loans to NRIs
As at September 30, 2018 Loan Book o/s Loan Book o/s Before Sell Down in Assets Under Management
last 12 months
Rs. bn US$ bn % Growth Rs. bn US$ bn % Growth Rs. bn US$ bn % Growth
Individuals 2,652 37 18% 2,810 39 25% 3,156 43 18%
Non-Individuals 1,139 16 14% 1,139 16 14% 1,146 16 13%
Total 3,791 53 17% 3,949 55 22% 4,302 59 17%
Individual loans sold (outstanding): Rs. 504.14 bn (US$ 6.94 bn) 15

AFFORDABLE HOUSING
Housing Loan Approvals Based on Income Slabs: H1 FY19
In Value terms In Number terms
HIG 36% HIG 16%
EWS 2%
EWS 7%
MIG 47%
MIG 46% LIG 16%

LIG 30%
Economically Weaker Section: Up to Rs 0.3 mn p.a Low Income Group: Above Rs 0.3 mn to Rs 0.6 mn p.a.
Middle Income Group: Above Rs 0.6 mn to Rs 1.8 mn p.a. High Income Group: Above Rs 1.8 mn p.a.
Increase in Housing Loans to EWS & LIG Segments – Volume Driven Business
• 37% of home loan approvals in volume terms has been to the EWS & LIG segments and 18% in
value terms
• Approving ~8,300 loans monthly in EWS/LIG segment; monthly average approvals: Rs 13.54 bn
• Average home loan – EWS: Rs 1.01 mn, LIG: Rs 1.76 mn
16
84% OF OUR MORTGAGES ARE SOURCED BY

OURSELVES OR THROUGH OUR AFFILIATES
September 30, 2018
Other Direct
Selling Agents
16% HDFC Bank 27%
Direct Walk-ins
4%
HDFC Sales
Private Limited
53%
Deposit & loan products offered at several locations through outreach programmes.
Total number of offices: 514 which is inclusive of 169 outlets of HDFC’s wholly owned distribution company. 17
OUR CONSERVATIVE LOAN PROFILE

UNDERLIES OUR HIGH CREDIT QUALITY
• Average Loan Size : Rs. 2.70 mn (US$ 37,159)
• Average Loan to Value : 69% (at origination)
• Average Loan Term : 13 years
• Average Age : 39 years
• Primary Security : Mortgage of property financed
• Repayment Type : Amortising
18
GROSS NON-PERFORMING LOANS (NPLs) &

PROVISIONS & LOAN LOSSES
1.31% 1.33% As at September 30, 2018

1.50% 1.14% 1.13%
1.11%
0.99% (Rs. in bn)
1.20%
Percentage
0.90% NPLs (3 months): 42.78

0.60%
Provisions & Loan Losses: 50.71
0.30%
0.00% Regulatory Provisioning: 29.51
Sep-17 Mar-18 Sep-18
•NPLs as % of the loan portfolio:
Individual Loans: 0.66%
GROSS NPLs PROVISIONS & LOAN LOSSES
Non-individual Loans: 2.18%
Total loan write offs since inception is less than 7 basis points of
cumulative disbursements.
19
CLASSIFICATION OF ASSETS
Sep-18 Jun-18 Mar-18
Stage 1 & 2 98.87% 98.82% 98.89%
Stage 3 1.13% 1.18% 1.11%
Total 100.00% 100.00% 100.00%
98.6% of loan instalments in Stage 1 & 2 are in the 0-30 day bucket
Stage 1 – Outstanding up to 30 days

Stage 2 – Outstanding for greater than 30 days but less than 90 days
Stage 3 – Outstanding for greater than 90 days 20
EXPECTED CREDIT LOSS(ECL) BASED
ON EXPOSURE AT DEFAULT (EAD)
Rs bn
As per IND AS Sep-18 Jun-18 Mar-18
Gross Stage 3 50.22 51.45 47.17
ECL Provision Stage 3 19.46 23.61 19.78
Net Stage 3 30.76 27.84 27.39
Coverage Ratio% Stage 3 39% 46% 42%
Gross Stage 1 & 2 3,774.29 3,694.59 3,579.61
ECL Provision Stage 1 & 2 30.68 27.54 31.62
Net Stage 1 & 2 3,743.61 3,667.05 3,547.99
ECL Provision % Stage 1 & 2 0.81% 0.75% 0.88%
ECL/EAD 1.31% 1.37% 1.42%
*ECL is based on the principle of providing for expected future losses, rather than incurred losses based on period of
default. Provisions are assessed using statistical modelling which facilitates granular analysis of the portfolio. 21
MULTIPLE SOURCES OF BORROWINGS

(As at September 30, 2018: Total Borrowings - US$ 47.23 bn)
100%
80% Debentures & Securities

55% 57% 54%
Percentage
60% Term Loans
Deposits
40% 12% 18%
13%
20%
33% 30% 28%
0%
Sep-16 Sep-17 Sep-18
Total Borrowings: Rs. 3,431.72 bn (US$ 47.23 bn)

22
LOAN SPREADS
12.00% 11.22% 2.40%
10.64%
10.22%
2.33% 9.76%
10.00% 2.35%
2.29%
8.00% 2.28% 2.30%
2.29%
6.00% 2.25%
8.93%
8.31% 7.94%
4.00% 2.20%
7.47%
2.00% 2.15%
0.00% 2.10%
FY16 FY17 FY18 Apr-Sep-18
Return on Loans Cost of Borrowings Spread
Apr-Sep 2018
Spread earned on:
Individual Loans 1.91%
Non-individual Loans 3.11%
Loan Book 2.28%
23
MATURITY PROFILE
(As at March 31, 2018)
2,500 2,360
2,128
2,000
Rs. in billion
1,500
1,029
1,000 860 900
757
500
0
Up to 1 yr >1-5 yrs Over 5 yrs
Assets Liabilities
Total Assets/Liabilities: Rs. 4,017 bn
The above graph reflects adjustments for prepayments and renewals in accordance with the
guidelines issued by National Housing Bank. 24
PRODUCTIVITY RATIOS
FY18 FY10 FY00 FY90
Number of employees 2,575 1,505 794 727
Number of outlets 332 214 67 24
Profit per employee (US$ '000)^ 506 416 118 8
Assets per employee (US$ mn) 22.9 16.4 4.4 0.5
Admin costs/assets (%) 0.26 0.29 0.49 0.76
Cost income ratio (%)^ 7.6 7.9 13.8 30.9
^To make ratios comparable, the profit on the sale of strategic investments has not been considered.
25
KEY FINANCIAL METRICS

FY18 FY17 FY16
Net Interest Margin(%) 4.0 4.1 4.1
Pre Tax RoAA (%)^ 3.3 3.4 3.5
Post Tax RoAA (%)^ 2.4 2.3 2.5
Return on Equity (%)^ 20.4 19.0 19.5

#
Capital Adequacy (%) 18.4 14.5 16.6
Of which Tier I 17.1 11.8 13.2
Tier II 1.3 2.7 3.4
^To make ratios comparable, the profit on the sale of strategic investments has not been considered.
#As on September 30, 2018.
26
RECONCILIATION OF PROFITS: IGAAP & IND AS

(Under IND AS 101: First Time Adoption of Ind AS)
Particulars Quarter ended Half-year ended
Sept 30, 2017 Sept 30, 2017
Rs bn
Profit After Tax as per Previous GAAP 20.98 36.51
Adjustments:
Adjustment on account of effective interest rate / forex (0.64) (1.70)
valuation / net interest on credit impaired loans
Adjustment on account of derecongition of (assigned) loans 0.65 0.65
Adjustment on account of expected credit loss 0.39 (0.12)
Adjustment due to fair value of stock options (2.80) (3.75)
Fair value change in investments 0.15 0.32
Reversal of Deferred tax liability on Section 36(1)(viii) 1.08 2.13
Other Adjustments (0.03) (0.01)
Total effect of Transition to Ind AS (1.20) (2.48)

Net Profit After Tax as per Ind AS 19.78 34.03
Other Comprehensive Income(net of tax) (0.63) (0.78)
Total Comprehensive Income (net of tax) as per Ind AS 19.15 33.25 27
STATEMENT OF PROFIT AND LOSS – FY19 Q2 (Standalone)

As per Ind AS
Jul-Sep-18 Jul-Sep-17 Growth
(Rs in billion) (Rs in billion) (%)
Operating Income of which:
Interest & Other Op Income 97.58 81.09 20%
Less: Interest Expenses 70.45 58.45 21%
Add: Net Income on Loans sold 3.97 2.26
Net Interest Income 31.10 24.90 25%
Add: Fees 1.99 1.93
Less: Commission 1.14 1.26
31.95 25.57 25%
Less: Non Interest Expenses 2.69 2.29
Less: Amortisation of ESOS and CSR Expenses 0.53 2.80
Less: Provisions & Loan Losses 4.01 (0.62)
Add: Other Income 0.11 0.04
Profit Before Tax, Dividend & Sale of Investments 24.83 21.14 17%
Dividend 0.06 5.37
Profit on Sale of Investments 10.00 0.63
Profit Before Tax 34.89 27.14 29%
Provision for Tax 10.22 7.36
Profit after tax Before Other Comprehensive Income 24.67 19.78 25%
Other Comprehensive Income (0.89) (0.63)
Total Comprehensive Income 23.78 19.15 24%
Effective tax rate (%) 29.3% 27.1%
28
STATEMENT OF PROFIT AND LOSS – FY19 H1 (Standalone)

As per Ind AS
Apr-Sep-18 Apr-Sep-17 Growth
Interest & Other Op Income 189.55 161.72 17%
Less: Interest Expenses 133.97 115.99 16%
Add: Income from Loans Sold 5.39 3.63
Add: Fees 3.41 3.21
Less: Commission 2.34 2.28
62.04 50.29 23%
Less: Amortisation of ESOS and CSR Expenses 2.76 3.75
Less: Provisions & Loan Losses 4.21 1.02
Profit Before Tax, Dividend & Sale of Investments 49.67 40.76 22%
Dividend 5.92 5.96
Profit after tax Before Other Comprehensive Income 46.57 34.03 37%
Other Comprehensive Income (1.18) (0.78)
Total Comprehensive Income 45.39 33.25 37%
29
BALANCE SHEET (Standalone)

Sep-18 Sep-17 Growth
(Rs. in billion) (Rs. in billion) (%)
Sources of Funds
Shareholders' Funds 708.01 424.56
Borrowings 3,431.72 3,003.37 14%
Current Liabilities & Provisions 130.38 180.54
4,270.11 3,608.47 18%
Application of Funds
Loans1 3,790.91 3,242.69 17%
Investments 386.12 257.35
Current/ Fixed Assets 93.08 108.43
4,270.11 3,608.47 18%
1Net of loans sold during the preceding 12 months amounting to Rs 158 bn of individual loans. If these loans were included,
the growth in loans would have been higher at 22%.
Individual loans amounting to Rs 158 bn were sold during the half year ended September 30, 2018.
30
VALUATION & SHAREHOLDING
31
Valuation and Shareholding
VALUATION – METHOD 1
• Number of shares outstanding: 1.717 bn
• Share Price as at October 31, 2018: Rs. 1,770
• Market Capitalisation: Rs. 3,039 bn (~US$ 41.8 bn)
Total Per Share
Rs bn US$ bn Rs
Net Worth 708 9.7 412
Add: Unaccounted gains on listed 1,627 22.4 947
investments
Add: Unaccounted gains on 114 1.6 67
unlisted investments
Adjusted Networth 2,449 33.7 1,426
Market Capitalisation 3,039 41.8
Price Per Share 1,770
Adjusted Price to Book Ratio 1.2 1.2

32
VALUATION – METHOD 2
• Number of shares outstanding: 1.717 bn
• Share Price as at October 31, 2018: Rs. 1,770
• Market Capitalisation: Rs. 3,039 bn (~US$ 41.8 bn)
Valuation Rs bn US$ bn
Market Capitalisation 3,039 41.8

Less: Unaccounted gains on listed investments 1,627 22.4
Less: Unaccounted gains on unlisted investments 114 1.6
Adjusted Market Capitalisation 1,298 17.8
Net Worth 708 9.7
Adjusted Price to Book Ratio 1.8 1.8

33
SHAREHOLDING PATTERN
75%
Foreign Shareholders - 75%
Individuals - 9%
Mutual Funds - 8%
Financial Institutions, Banks &

Insurance Companies - 7%
9%
Companies - 1%
8%
1% 7%
34
KEY ASSOCIATES AND
SUBSIDIARIES
35
Associates and Subsidiaries
• 21.4% owned by HDFC

HDFC BANK
• ADRs listed on NYSE
• 4,825 branches, 13,018 ATMs
• Key business areas
– Wholesale banking Retail banking Treasury operations
• Financials (as per Indian GAAP) for half year ended September 30, 2018
– Advances as at September 30, 2018, stood at Rs. 7,508.4 bn – an increase of 24%
over the previous year
– Total deposits stood at Rs. 8,333.6 bn – an increase of 21% over the previous year
– PAT: Rs. 96.1 bn – an increase of 19% over the previous year
• Arrangement between HDFC & HDFC Bank
– HDFC Bank sources home loans for a fee
– Loans originated in the books of HDFC
– HDFC offers a part of the disbursed loans for assignment to HDFC Bank (up to 70% of loans
sourced by HDFC Bank)
– HDFC retains a spread on the loans that have been assigned

• Market Capitalisation (October 31, 2018): ~US$ 71 bn 36
HDFC STANDARD LIFE INSURANCE

COMPANY LIMITED (HDFC LIFE)
• HDFC holds 51.6% and Standard Life (Mauritius Holdings) 2006 Limited holds 29.3% of the equity
of HDFC Life.
• Total premium income for the half year ended September 30, 2018 stood at Rs. 119 bn – growth of
30% over the previous year
• For the half year ended September 30, 2018, HDFC Life had a market share of 21% in terms of
total new business received premium (private sector)
• Financial Highlights
– New Business Margin for the half year ended September 30, 2018 (post overrun): 24.3% (PY: 22.4%)
– Embedded Value (Indian Embedded Value methodology) stood at Rs. 163.8 bn as at September 30,
2018 (PY: Rs. 140.1 bn)
– Operating Return on Embedded Value for the half year ended September 30, 2018 stood at 19.6%
(PY: 21.2%)
– Assets Under Management as at September 30, 2018 stood at Rs. 1,132.3 bn (PY: Rs. 995.3 bn)
– Indian GAAP profits for the half year ended September 30, 2018: Rs. 6.7 bn (PY: Rs. 5.5 bn)
• Product mix - Unit Linked: 59%, Non-Par Savings: 11%, Non-Par Protection: 7%, Traditional Par:
23%,
• Market capitalisation (October 31, 2018): ~US$ 10 bn 37
HDFC ASSET MANAGEMENT

• HDFC holds 52.8% of HDFC Asset Management, Standard Life Investments holds 30%
• Total Assets under Management (AUM) as at September 30, 2018, stood at Rs. 2.93 trillion
(US$ 40 bn)
• Equity-oriented assets of HDFC MF as a proportion of total AUM was 52%
• Second largest in the industry on the basis of quarterly average assets under management
(Source: AMFI)
• Overall market share: 13.3%
• Market share of equity oriented funds: 16%
• Individual accounts of HDFC MF as at September 30, 2018

• 8.6 million live accounts
• 64% of total monthly average AUM of HDFC MF is contributed by individuals
• Market share of 15.1% of individual monthly average AUM
• PAT for half year ended September 30, 2018 (as per Ind AS): Rs. 4.1 bn – an increase of 19%
• Market capitalisation (October 31, 2018): ~US$ 4 bn 38

HDFC ERGO GENERAL INSURANCE COMPANY LTD.

• HDFC holds 50.5% and ERGO holds 48.3% of the equity of HDFC ERGO
• Gross direct premium for the half year ended September 30, 2018 stood at: Rs. 42 bn – a
growth of 28% (excluding weather/ crop business)
• Combined Ratio as at September 30, 2018: 98.6%
• Market share of 9.8% (private sector) and 5.1% (overall) in terms of gross direct premium
for the half year ended September 30, 2018 (Source: GI Council)
• Products: Motor, health, travel, home and personal accident in the retail segment;
property, marine, aviation and liability insurance in the corporate segment and crop
insurance in the rural segment
– Retail accounts for 51% of the total business
• Profit After Tax for the half year ended September 30, 2018: Rs. 2.30 bn (PY: Rs. 2.02 bn)
39
GRUH FINANCE LIMITED (GRUH)

• 57.9% owned by HDFC
• Registered housing finance company offering loans to individuals for purchase,

construction and renovation of dwelling units
• Also offers loans to the self-employed segment where formal income proofs are
not available.
• Retail network of 194 offices across 11 states in India – Gujarat, Maharashtra,

Karnataka, Madhya Pradesh, Rajasthan, Chhattisgarh, Tamil Nadu, Uttar Pradesh, West
Bengal, Bihar and Jharkhand
• Financials for the half year ended September 30, 2018
• Loan portfolio as at September 30, 2018, stood at Rs. 167 bn – an increase of 17%
• PAT (as per Ind AS): Rs. 2.20 bn – an increase of 20% over the previous year
• Market capitalisation (October 31, 2018): ~US$ 3 bn

40
PROPERTY FUNDS
HDFC PROPERTY VENTURES HDFC CAPITAL ADVISORS
• HDFC India Real Estate Fund • HDFC Capital Affordable Real Estate Fund (HCARE)
– Launched in 2005 – HCARE-1 was set up as a SEBI registered AIF in 2016
– Fund corpus : Rs. 10 billion – fully invested with a fund size of US$ 450 mn
– Domestic investors, close-ended fund
– HCARE-2, set up in December 2017, achieved its final
– 18 investments across India
close in October 2018 with a fund size of US$ 650 mn
– Fund has been substantially exited; 1.6 X of the
– HCARE 1 & 2 together create a US$ 1.1 bn platform
fund corpus has been returned to investors
• HIREF International LLC targeting affordable and mid-income residential
– Launched in 2007 projects
– Fund corpus : US$ 800 million – The objective is to provide long-term equity and
– International investors, 9 year close-ended fund mezzanine capital to developers building affordable
– 14 investments across India and middle- income housing across India’s leading 20
– Some exits have been made and the Fund is in the cities
process of exiting from the balance investments – Primary investors in HCARE 1 & 2 is a wholly owned
• HIREF International LLC II Pte Ltd. subsidiary of Abu Dhabi Investment Authority (ADIA)
– Fund corpus: US$ 321 million along with the National Investment and Infrastructure
– Final close in April 2015 Fund (NIIF) in HCARE-2
– International investors, 8 year close-ended fund
– HDFC Capital Advisors is the investment advisor for
– 6 investments across India
the funds and is one of the largest real estate fund
– Fund is in process of investing the corpus
managers in the country
41
HDFC CREDILA
• HDFC holds 90.8% in HDFC Credila
• HDFC Credila is a non-banking finance company and was the first Indian lender to
exclusively focus on education loans
• The company lends to under-graduate and post-graduate students studying in India or

abroad
• As at September 30, 2018
– Profit After Tax (as per Ind AS): Rs. 487 mn
– Cumulative disbursements: Rs. 77 bn
– Loan book outstanding as at September 30, 2018: Rs. 49 bn – growth of 28% over
previous year
• 45% of the loan book is collateralised
– Average loan: Rs. 1.79 mn
– Gross non-performing assets: 0.07%

42
FINANCIALS
Standalone & Consolidated
FY18 (Based on Indian GAAP)
43
Financials: Standalone
BALANCE SHEET (Standalone)

Mar-18 Mar-17 Growth
(Rs. in billion) (Rs. in billion) (%)
Sources of Funds
Shareholders' Funds 614.03 396.45
Borrowings 3,206.55 2,805.34 14%
4,016.74 3,373.06 19%
Loans1 3,594.42 2,964.72 21%
Investments 305.33 204.10
Current/ Fixed Assets 116.99 204.24
4,016.74 3,373.06 19%
Loans sold in FY18: Rs 65 bn (PY Rs 160 bn)

1Net of loans sold during the preceding 12 months. If these loans were included, the growth in loans would have been higher
at 23%.
44
Financials: Standalone
PROFIT AND LOSS ACCOUNT – FY18 (Standalone)

Apr-Mar-18 Apr-Mar-17 Growth
Interest Fees & Other Op Income 335.83 308.56 9%
Interest Expenses 222.35 208.97 6%
Add: Fees 8.15 8.49
Less: Commission 6.70 5.02 33%
114.93 103.06 12%
Less: Provisions 4.55 7.00
Profit Before Tax, Dividend & Sale of Investments & 101.25 88.16 15%
Exceptional Item
Dividend 10.79 9.09
Exceptional Items 36.82 -
Profit after tax but before DTL on Special Reserve 126.71 78.74 61%
Less: Provision for DTL on Special Reserve 5.07 4.31
Profit After Tax 121.64 74.43 63%
Note: Exceptional items include profit of Rs 52.57 bn from the Initial Public Offer of HDFC Life and additional special provision of Rs 15.75 bn as a
charge to the statement of profit and loss.
Transaction of HDFC Life has triggered provision of Minimum Alternate Tax & tax expense has been adjusted accordingly. 45
Financials: Consolidated
BALANCE SHEET (Consolidated)

Mar-18 Mar-17 Growth
(Rs . in billion) (Rs . in billion) (%)
Sources of Funds
Shareholders' Funds 865.41 600.59 44%
Minority Interest 46.98 34.73
Policy Liabilities 859.47 742.56
Loan Funds 3,366.30 2,937.95 15%
5,627.01 4,741.37 19%
Loans* 3,791.73 3,128.91 21%
Investments 1,632.28 1,328.55
Current Assets, Advances & Fixed Assets 200.78 277.71
Goodwill on Consolidation 2.22 6.20
5,627.01 4,741.37 19%
*Net of loans sold during the preceding 12 months amounting to Rs 65 bn. If these loans were included, the growth in loans
would have been 23%.
No loans were sold during the half year ended March 31, 2018. 46
PROFIT AND LOSS ACCOUNT (Consolidated)

Apr-Mar-18 Apr-Mar-17 Growth
Income (Rs. in billion) (Rs. in billion) (%)
Revenue from Operations 382.45 350.06 9%
Premium Income from Insurance Business 263.62 217.29 21%
Other Operating Income from Insurance Business 38.69 31.23
Other Income 0.24 0.53
685.00 599.11 14%
Expenses
Finance Cost 234.53 219.53 7%
Staff/Establishment/Other Expenses 24.04 21.34
Claims paid pertaining to Insurance Business 153.37 118.88
Commission, Operating & Other Expenses- Insurance Business 132.36 116.10
Depreciation & Provisions 5.64 8.53
549.94 484.38 14%
Profit Before Sale of Investments, Exceptional Items and Tax 135.06 114.73 18%
Exceptional Items 34.54 -
Tax Expense 40.01 40.21
Net Profit 136.01 86.29 58%
Share of profit of minority shareholder (10.76) (7.97)
Net share of profit from Associates (Equity Method) 37.30 32.19
Profit after Tax attributable to the Group 162.55 110.51 47% 47
CONSOLIDATED PROFIT AFTER TAX – FY18

As per Indian GAAP
Mar-18 Mar-17
(Rs. in billion) (Rs. in billion)
HDFC Profit After Tax 121.64 74.43
HDFC Life 6.00 5.18
HDFC ERGO 1.91 1.51
GRUH 1.98 1.73
HDFC Bank 37.47 32.33
HDFC-AMC 3.75 3.02
Others 2.56 2.89
Dividend and Other Adjustments (12.76) (10.58)
Consolidated Profit After Tax 162.55 110.51
Adjustment for Securities Premium debited in
HDFC for Zero Coupon Bonds 3.84 4.96
Adjusted Profit after Tax 158.71 105.55
Contribution of subs/ associates to the
33% 33%
consolidated PAT*
48
*Adjusted for exceptional items
Thank You
November 2, 2018
49

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Housing Development Finance

• Mortgage Market in India

• Operational and Financial Highlights: Mortgages

• Valuation and Shareholding

• Key Subsidiaries and Associates

• Financials FY18: Standalone & Consolidated

• Incorporated in 1977 as the first

interests beyond mortgages

21.4% 51.6% 52.8% 50.5%

Market capitalisation*: Market capitalisation*: Market capitalisation*:

100% 90.8% 57.9% 100%

*As at October 31, 2018

• Individual Loans Originated CAGR (5 years) : 18%

• Cumulative Housing Units Financed : 6.6 million

• Total loan write offs since inception : Under 7 basis points

• Cost to Income Ratio* : 9%

• Unaccounted gains on listed investments : Rs. 1,697.44 bn

• Profit After Tax CAGR (5 years) : Standalone - 12%

* As at September 30, 2018 5

DRIVERS OF MORTGAGE GROWTH

• Other Demand Drivers

Annual Income (Rs. 100,000)

Property Cost Affordability Annual Income

Based on customer data of a large metro city 8

LOW PENETRATION IMPLIES ROOM FOR GROWTH

TAX INCENTIVES & THE CREDIT LINKED SUBSIDY

Nominal Interest Rate(%) 8.85% 10.75% 13.25%

Max deduction for interest allowed 200,000 150,000 75,000

Total amount paid per year 368,581 321,636 376,812

CREDIT LINKED SUBSIDY SCHEME – AN ENABLER

OTHER DEMAND DRIVERS

CORE BUSINESS – LENDING

Individual loans sold (outstanding): Rs. 504.14 bn (US$ 6.94 bn) 15

MIG 46% LIG 16%

84% OF OUR MORTGAGES ARE SOURCED BY

OUR CONSERVATIVE LOAN PROFILE

• Average Loan to Value : 69% (at origination)

• Average Loan Term : 13 years

• Average Age : 39 years

• Primary Security : Mortgage of property financed

• Repayment Type : Amortising

GROSS NON-PERFORMING LOANS (NPLs) &

1.31% 1.33% As at September 30, 2018

0.90% NPLs (3 months): 42.78

Stage 1 & 2 98.87% 98.82% 98.89%

Stage 3 1.13% 1.18% 1.11%

Total 100.00% 100.00% 100.00%

Stage 1 – Outstanding up to 30 days

MULTIPLE SOURCES OF BORROWINGS

80% Debentures & Securities

60% Term Loans

Total Borrowings: Rs. 3,431.72 bn (US$ 47.23 bn)

Number of outlets 332 214 67 24

Profit per employee (US$ '000)^ 506 416 118 8

Assets per employee (US$ mn) 22.9 16.4 4.4 0.5

Admin costs/assets (%) 0.26 0.29 0.49 0.76

Cost income ratio (%)^ 7.6 7.9 13.8 30.9

KEY FINANCIAL METRICS

Return on Equity (%)^ 20.4 19.0 19.5

Market capitalisation: Market capitalisation: Market capitalisation*: