HDB Financial Services Annual Report | Financials for 2023-24

HDB Financial Services Limited (HDB Financial) Return Comparision with Primex 40 Index

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Primex-40
HDB Financial Services Limited

HDB Financial Services Limited Balance Sheet (Rs in Crores)

Particulars	31-03-2024	31-03-2023
ASSETS
Financial Assets
Cash and cash equivalents	647.85	395.9
Bank balances other than above	54.66	257.92
Derivative financial instruments	1.91	165.34
Trade receivables	124.61	65.76
Loans	86,721.26	66,382.67
Investments	3,380.33	1,243.25
Other financial assets	39.5	34.87
Non-Financial Assets
Current tax assets (Net)	41.29	25.11
Deferred tax assets (Net)	939.95	1,000.87
Property, plant and equipment	162.53	122.37
Capital work-in-progress	-	-
Other intangible assets	22.15	20.41
Right of use Assets	326.51	244.27
Other non-financial assets	93.96	91.65
TOTAL ASSETS	92,556.51	70,050.39
LIABILITIES AND EQUITY:
Financial Liabilities
Derivative financial instruments	4.77	-
Trade payables
Total outstanding dues of creditors other than micro enterprises and small enterprises	509	291.84
Debt securities	34,851.12	27,096.41
Borrowings (other than debt securities)	33,831.38	24,227.80
Subordinated liabilities	5,648.17	3,541.10
Other financial liabilities	2,955.27	2,778.43
Non-Financial Liabilities
Current tax liabilities (net)	58.65	41.97
Provisions	502.94	368.96
Other non-financial liabilities	452.5	266.91
Equity
Equity share capital	793.08	791.4
Other equity	12,949.63	10,645.57
TOTAL LIABILITIES AND EQUITY	92,556.51	70,050.39

HDB Financial Services Limited Profit & Loss Statement (Rs in Crores)

Particulars	31-03-2024	31-03-2023
Interest income	11,156.72	8,927.78
Sale of services	1,949.55	2,633.93
Other financial charges	953.11	756.41
Net gain on fair value changes	113.69	85.07
Net gain / (loss) on derecognition of financial instruments under amortised cost category	-1.95	-0.31
Total Revenue from operations	14,171.12	12,402.88
Finance Costs	4,864.32	3,511.92
Impairment on financial instruments	1,067.39	1,330.40
Employee Benefits Expenses	3,850.75	4,057.57
Depreciation, amortisation and impairment	145.14	111.84
Others expenses	938.85	763.75
Total Expenses	10,866.45	9,775.48
Profit/(loss) before tax	3,304.67	2,627.40
Current tax	770.67	621.3
Deferred tax (credit)	73.16	46.75
Profit for the year	2,460.84	1,959.35
Other Comprehensive Income
Remeasurement loss on defined benefit plan	-31.54	-5.48
Income tax relating to items that will not be reclassified to profit or loss	7.94	1.38
Movement in cash flow hedge reserve	-17.1	19.59
Income tax relating to items that will be reclassified to profit or loss	4.3	-4.93
Other Comprehensive Income	-36.4	10.56
Total Comprehensive Income for the year	2,424.44	1,969.91
Earnings per equity share (for continuing operations)
Basic (`)	31.08	24.78
Diluted (`)	31.04	24.76

HDB Financial Services Limited Cash Flow Statement (Rs in Crores)

Particulars	31-03-2024	31-03-2023
CASH FLOW FROM OPERATING ACTIVITIES
Profit/(loss) before tax	3,304.67	2,627.40
Adjustments for
Interest Income	-11,156.72	-8,927.78
Interest Expenses	4,771.63	3,502.92
(Profit)/loss on sale of asset	-0.85	-1.01
Realised net loss/ (gain) on FVTPL investments	-89.91	-90.67
Unrealised gain on FVTPL investments	-23.78	5.6
Discount on commercial paper	77.01	9
Provision for compensated absence and gratuity	29.87	6.59
Employee share-based payment expenses	55.24	43.64
Depreciation, amortisation and impairment	145.14	111.84
Impairment on financial instruments	1,067.39	1,330.40
Operating cash flow before working capital changes	-1,820.31	-1,382.07
Adjustments for working capital changes:
(Increase)/ decrease in Loans	-21,405.98	-10,462.68
(Increase)/ decrease in trade receivables	-58.85	76.06
(Increase)/ decrease in other financial assets and others	291.32	-0.19
Increase/(decrease) in other financial and non financial liabilities & provisions	-44.6	506.53
Increase/(decrease) in trade payables	217.16	44.93
Cash generated from/(Used in) operations before adjustments for interest received and interest paid	-22,821.26	-11,217.42
Interest Paid	-4,110.50	-3,842.14
Interest Received	10,946.14	8,841.36
Cash generated from/(Used in) operations	-15,985.62	-6,218.20
Direct taxes (paid)/net of refunds	-750.42	-632.41
Net cash flow generated from/(used in) operating activities	-16,736.04	-6,850.61
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of investments	-52,917.26	-49,267.66
Sale of investments	50,893.87	50,350.80
Purchase of fixed assets	-123.35	-111.32
Sale of fixed assets	1.18	1.5
Net cash generated (used in)/ from investing activities	-2,145.56	973.32
CASH FLOW FROM FINANCING ACTIVITIES
Debt securities issued	22,167.71	10,099.18
Debt securities repaid	-14,490.01	-8,210.60
Borrowings other than debt securities issued	29,910.87	17,207.75
Borrowings other than debt securities repaid	-20,307.29	-12,507.21
Subordinated debt issued	2,337.07	-
Subordinated debt repaid	-230	-600
Proceeds from issue of shares and security premium	71.45	33.93
Repayment of lease liabilities	-80.87	-76.81
Dividend paid	-245.38	-150.25
Net cash generated (used in)/ from financing activities	19,133.55	5,795.99
Net (decrease)/increase in cash and cash equivalents	251.95	-81.3
Add: Cash and cash equivalents as at the beginning of the year	395.9	477.2
Cash and cash equivalents as at the end of the year	647.85	395.9
Components of cash and cash equivalents
Balances with banks	606.1	358.51
Demand drafts on hand	6.3	8.87
Cash on hand	35.45	28.52
Total	647.85	395.9

Here is a summary of the Cash Flow Statement for the years 2024 and 2023:

Cash Flow from Operating Activities

Profit/(Loss) Before Tax:

The company reported a profit before tax of ₹3,304.67 million in 2024, up from ₹2,627.40 million in 2023, indicating an improvement in profitability.

Adjustments:

Interest Income: Increased significantly from ₹8,927.78 million in 2023 to ₹11,156.72 million in 2024, reflecting higher earnings from interest-bearing assets.

Interest Expenses: Increased from ₹3,502.92 million in 2023 to ₹4,771.63 million in 2024, indicating higher interest costs.

(Profit)/Loss on Sale of Asset: A minor profit of ₹0.85 million in 2024 compared to ₹1.01 million in 2023.

Realized Net Loss/(Gain) on FVTPL Investments: Slightly decreased from a gain of ₹90.67 million in 2023 to ₹89.91 million in 2024.

Unrealized Gain on FVTPL Investments: Shifted from a loss of ₹5.6 million in 2023 to a gain of ₹23.78 million in 2024.

Discount on Commercial Paper: Increased from ₹9 million in 2023 to ₹77.01 million in 2024.

Provision for Compensated Absence and Gratuity: Increased from ₹6.59 million in 2023 to ₹29.87 million in 2024.

Employee Share-Based Payment Expenses: Increased from ₹43.64 million in 2023 to ₹55.24 million in 2024.

Depreciation, Amortisation, and Impairment: Increased from ₹111.84 million in 2023 to ₹145.14 million in 2024.

Impairment on Financial Instruments: Decreased from ₹1,330.40 million in 2023 to ₹1,067.39 million in 2024.

Operating Cash Flow Before Working Capital Changes:

The operating cash flow before working capital changes showed a larger outflow, increasing from ₹-1,382.07 million in 2023 to ₹-1,820.31 million in 2024.

Adjustments for Working Capital Changes:

(Increase)/Decrease in Loans: The outflow increased significantly from ₹10,462.68 million in 2023 to ₹21,405.98 million in 2024, indicating a higher amount of loans issued.

(Increase)/Decrease in Trade Receivables: Shifted from a decrease of ₹76.06 million in 2023 to an increase of ₹58.85 million in 2024.

(Increase)/Decrease in Other Financial Assets and Others: Changed from a decrease of ₹0.19 million in 2023 to an increase of ₹291.32 million in 2024.

Increase/(Decrease) in Other Financial and Non-Financial Liabilities & Provisions: Shifted from an increase of ₹506.53 million in 2023 to a decrease of ₹44.6 million in 2024.

Increase/(Decrease) in Trade Payables: Increased from ₹44.93 million in 2023 to ₹217.16 million in 2024.

Cash Generated from/ (Used in) Operations Before Adjustments for Interest Received and Interest Paid:

The cash outflow increased significantly from ₹-11,217.42 million in 2023 to ₹-22,821.26 million in 2024.

Interest Paid:

Increased from ₹3,842.14 million in 2023 to ₹4,110.50 million in 2024.

Interest Received:

Increased from ₹8,841.36 million in 2023 to ₹10,946.14 million in 2024.

Cash Generated from/ (Used in) Operations:

The cash outflow increased from ₹-6,218.20 million in 2023 to ₹-15,985.62 million in 2024.

Direct Taxes (Paid)/Net of Refunds:

Increased from ₹-632.41 million in 2023 to ₹-750.42 million in 2024.

Net Cash Flow Generated from/ (Used in) Operating Activities:

The net cash outflow increased from ₹-6,850.61 million in 2023 to ₹-16,736.04 million in 2024, indicating a larger operational cash deficit.

Cash Flow from Investing Activities

Purchase of Investments:

Increased from ₹49,267.66 million in 2023 to ₹52,917.26 million in 2024, indicating higher investment activities.

Sale of Investments:

Decreased slightly from ₹50,350.80 million in 2023 to ₹50,893.87 million in 2024.

Purchase of Fixed Assets:

Increased slightly from ₹111.32 million in 2023 to ₹123.35 million in 2024.

Sale of Fixed Assets:

Decreased from ₹1.5 million in 2023 to ₹1.18 million in 2024.

Net Cash Generated (Used in)/From Investing Activities:

The net cash inflow decreased from ₹973.32 million in 2023 to a net outflow of ₹2,145.56 million in 2024.

Cash Flow from Financing Activities

Debt Securities Issued:

Increased significantly from ₹10,099.18 million in 2023 to ₹22,167.71 million in 2024.

Debt Securities Repaid:

Increased from ₹8,210.60 million in 2023 to ₹14,490.01 million in 2024.

Borrowings Other Than Debt Securities Issued:

Increased from ₹17,207.75 million in 2023 to ₹29,910.87 million in 2024.

Borrowings Other Than Debt Securities Repaid:

Increased from ₹12,507.21 million in 2023 to ₹20,307.29 million in 2024.

Subordinated Debt Issued:

A new issuance of ₹2,337.07 million in 2024, with no comparable issuance in 2023.

Subordinated Debt Repaid:

Decreased from ₹600 million in 2023 to ₹230 million in 2024.

Proceeds from Issue of Shares and Security Premium:

Increased from ₹33.93 million in 2023 to ₹71.45 million in 2024.

Repayment of Lease Liabilities:

Increased slightly from ₹76.81 million in 2023 to ₹80.87 million in 2024.

Dividend Paid:

Increased from ₹150.25 million in 2023 to ₹245.38 million in 2024.

Net Cash Generated (Used in)/From Financing Activities:

The net cash inflow increased significantly from ₹5,795.99 million in 2023 to ₹19,133.55 million in 2024, reflecting higher financing activities.

Net Increase/(Decrease) in Cash and Cash Equivalents

The net increase in cash and cash equivalents was ₹251.95 million in 2024, compared to a decrease of ₹81.3 million in 2023, indicating a positive cash position at the end of the year.

Cash and Cash Equivalents at the Beginning and End of the Year

Beginning Balance:

Decreased from ₹477.2 million in 2023 to ₹395.9 million in 2024.

Ending Balance:

Increased from ₹395.9 million in 2023 to ₹647.85 million in 2024, indicating improved liquidity.

Components of Cash and Cash Equivalents

Balances with Banks:

Increased from ₹358.51 million in 2023 to ₹606.1 million in 2024.

Demand Drafts on Hand:

Decreased from ₹8.87 million in 2023 to ₹6.3 million in 2024.

Cash on Hand:

Increased from ₹28.52 million in 2023 to ₹35.45 million in 2024.

Total:

Increased from ₹395.9 million in 2023 to ₹647.85 million in 2024, indicating a stronger cash position at the end of the year.

Financial Ratios of HDB Financial Services Limited

Particulars	2024
Commercial Paper as a % of Total Public Funds	1.55%
Commercial Paper as a % of Total Liabilities*	1.46%
Commercial Paper as a % of Total Assets	1.24%
Other Short-Term Liabilities as % of Total Public Funds	37.89%
Other Short-Term Liabilities as % of Total Liabilities	35.74%
Other Short-Term Liabilities as a % of Total Assets	30.43%

Here is a summary of the financial and operational metrics for HDB Financial Services Limited for the year 2024:

Commercial Paper as a % of Total Public Funds

2024: 1.55%

Insight: This indicates that 1.55% of HDB Financial Services ' total public funds are financed through commercial paper, suggesting a relatively low reliance on this short-term borrowing instrument.

Commercial Paper as a % of Total Liabilities

2024: 1.46%

Insight: Commercial paper constitutes 1.46% of the total liabilities. This low percentage highlights that commercial paper is a minor component of the company’s overall liability structure.

Commercial Paper as a % of Total Assets

2024: 1.24%

Insight: With commercial paper accounting for 1.24% of total assets, the company has limited its use of this short-term financing method, ensuring a more balanced asset structure.

Other Short-Term Liabilities as % of Total Public Funds

2024: 37.89%

Insight: Other short-term liabilities make up 37.89% of total public funds. This significant percentage indicates a considerable reliance on short-term liabilities, which may impact liquidity management.

Other Short-Term Liabilities as % of Total Liabilities

2024: 35.74%

Insight: These liabilities constitute 35.74% of the company’s total liabilities, suggesting that a significant portion of the company 's liabilities are due in the short term, necessitating robust short-term liquidity management.

Other Short-Term Liabilities as a % of Total Assets

2024: 30.43%

Insight: With 30.43% of total assets financed by other short-term liabilities, HDB Financial Services shows a notable reliance on short-term funding sources. This could pose liquidity risks if not managed effectively.

Dividend History

Particulars	2024	2023
Dividend Per Share (Final Dividend)	1.00	1.10
Dividend Per Share (Interim Dividend)	2.00	0.90

HDB Financial Services Limited Recent Financial Performance

Dividend per Share: The specific final dividend per share figure for 2024 & 2023 is Rs. 1.00 & Rs. 1.10 & Interim Dividend Paid by the company during the year 2024 & 2023 is Rs. 2.00 & Rs. 0.90, Dividend per share represents the portion of a company 's earnings that is distributed to shareholders in the form of dividends. A higher dividend per share may indicate that the company is sharing more of its profits with shareholders.