HDB Financial Services, a subsidiary of the esteemed HDFC Group, recently released its half-yearly results for FY21 on October 17, 2020, as published in the National Stock Exchange. These results, crucial for understanding the company's financial trajectory, have been a topic of interest in the financial sector, especially when compared to the performance of HDFC Bank.

The HDB Financial results for the first half of FY21 have shown a noticeable stagnation in revenue growth. The company reported a revenue of ₹5,371 Crores, a marginal increase from ₹5,205 Crores in the same period last year. However, the more striking aspect of the HDB Financial results is the significant decline in Profit After Tax (PAT), which plummeted to just ₹26 Crores from ₹427 Crores in the previous year. This drastic 93% decrease can be largely attributed to a substantial rise in loan impairment costs, which amounted to ₹937 Crores in the first half of FY21.

In addition to these financial challenges, HDB Financial Services has reportedly undertaken workforce adjustments, as indicated by the reduction in employee benefit expenses from ₹1,536 Crores last year to ₹1,476 Crores. This move, widely covered in various newspapers, reflects the company's efforts to streamline its operations in response to the prevailing economic conditions.

As of September 30, 2020, HDB Financial Services' total loan book stood at ₹57,528 Crores. An important metric to note is the book value per share, which was recorded at ₹101 as of the same date.

Key financial parameters from the HDB Financial results include a Debt-to-Equity ratio (D/E) of 6.6, indicating a relatively high leverage. Despite this, the company's financial instruments, including bank facilities, non-convertible debentures, subordinated bond issues, and perpetual bond issues, maintain an AAA/Stable rating from both ICRA and CRISIL. This rating signifies a strong credit profile and investor confidence in the company's financial stability.

Moreover, HDB Financial Services has been consistent in servicing its debt obligations. The company maintains a healthy capital adequacy ratio and possesses adequate capital and financial resources for its operations, as evidenced in its 6MFY21 results. Despite the challenging times marked by the pandemic, HDB Financials remains a key player in the NBFC sector, adapting and navigating through these unprecedented circumstances.