HDFC reported net profit of Rs5.34bn (higher than our estimate), a ~32% yoy growth on a pre-exceptional basis
(17% yoy de-growth including exceptionals). As anticipated, there is some moderation in disbursement growth to
~23% in Q2FY09 from ~26% in FY08 in the context of high interest rates, however approvals have continued to
grow at ~26% yoy to ~Rs141.8bn. Notably, growth in the retail segment continues unabated with individual
disbursements up 30%+ yoy. NII continued to post robust growth, up ~27% yoy to Rs7.95bn on the back of stable
NIMs. Commendably, despite the challenging environment, asset quality has improved with 180dpd NPLs down
by 22bps yoy to 0.62% and 90dpd NPLs down to 1.09% by 12bps. As expected, reported non-fund revenues degrew
by 82% yoy, with limited equity trading gains booked in the quarter.

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