The rise in profits was on account of growth in interest income as the company had nil profit from sale of investments in the just-ended quarter, said Mr Keki Mistry, CEO and Vice-Chairman. Last year, the profit from sale of investments was Rs 51 crore.

“Our net interest income increased by 30 per cent to Rs 1,077 crore, from Rs 830 crore last year,” Mr Mistry said.

The reduction in costs was reflected in margins, which increased to 4 per cent, from 3.8 per cent.

Total approvals grew by 30 per cent and disbursals grew by 25 per cent. In the individual loans segment, approvals grew by 56 per cent and disbursals grew by 62 per cent, partly due to the base effect of last year, Mr Mistry said. Individual loans comprise 70 per cent of the total loan portfolio, while wholesale loans or loans to corporates account for the remaining 30 per cent.

Spreads went up marginally to 2.31 per cent as on June 2010, from 2.24 per cent in June 2009, Mr Mistry said. “Spreads will stabilise around these levels. They would be five basis points higher or lower,’’ Mr Mistry said.

This year HDFC is targeting a growth of around 20-25 per cent in sanctions and approvals.

About interest rates, Mr Mistry said there is a chance that the Reserve Bank of India may increase reverse repo and repo rates by 25 basis points in the July monetary policy.

Shares of HDFC closed at Rs 3,077.6, up 0.47 per cent, from the previous close of Rs 3,063.2, on BSE, on Wednesday. Speaking at the company’s annual general meeting held, in Mumbai today, Mr Deepak Parekh, Chairman, HDFC, said that there is excessive supply of commercial real estate, due to which rents and prices have come off from the peak levels. “About 400 million sq ft of IT and office space is likely to be available in the next 12 months,’’ he said.

Real estate

However, in the case of residential property, prices have gone back to the June 2007 levels, due to factors such as improved economic scenario and sentiments and developers charging premium.

“My view is that prices should come down. But they cannot be generalised across the country. They are different in different cities,’’ he said.

HDFC’s life insurance subsidiary, HDFC Standard Life, is likely to break even next year, after which the company will look at a public listing, Mr Parekh said.