MUMBAI :  IDFC Ltd reported a 13.46% on-year decline in its consolidated net profit for Apr-Jun at 4.82 bln rupees owing to a fall in income from operations.

The net profit was, however, better than the market estimate of 4.50 bln rupees. Changes in accounting policies provided a boost to the profit. The Apr-Jun performance was a vast improvement over its Jan-Mar consolidated net profit of 2.58 bln rupees, which was 50.93% lower on year.

Consolidated income from operations in Apr-Jun stood at 21.18 bln rupees, down 7.67% on year. Finance costs on a consolidated basis rose to 13.92 bln rupees, from 12.78 bln rupees a year ago, pressuring profitability. Other income or non-interest income was at 666.3 mln rupees, sharply up from 5.7 mln rupees a year ago.

IDFC Ltd has made some accounting changes on depreciation, which led to a fall in tax expenses during the quarter but augmented by creation of a deferred tax liability, the company said in a note to its accounts. The depreciation charge for Apr-Jun, including a write back for depreciation accounted till March 2014 worth 847.1 mln rupees, was lower by 877.4 mln rupees.

Consequently, IDFC has created a deferred tax liability of 174.1 mln rupees, including 164.8 mln rupees of liability till March 2014, to account for the depreciation changes. IDFC said these accounting changes alone had increased the Apr-Jun profit after tax by 703.3 mln rupees.  On a standalone basis, Apr-Jun net profit was at 4.49 bln rupees, down from 5.14 bln rupees a year ago.

The asset quality for IDFC continued to take a beating, and saw further deterioration during the quarter ended Jun 30. On a standalone basis, IDFC’s gross non-performing loans ratio rose to 0.64% as on Jun 30, from 0.32% year ago and 0.56% a quarter ago. In Apr-Jun, IDFC’s standalone provisions rose 241.8% on year to 2.02 bln rupees.   -Cogencis

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