Even though the housing loan market was suffering from inadequate demand, India's leading mortgage lender, HDFC managed to post a more than expected growth of 20% during the last quarter of the previous fiscal. The net profits for the lender rose to Rs 733 crore against a net profit of Rs 609.5 crore, a year ago.

HDFC's total income during the period under review increased by 36% to Rs 3,152 crore from Rs 2,318 crore a year earlier. Between January and March 2009, some house builders assured that they would pass on the future rate benefits to the customers which helped HDFC to sell more loans at the back of increased sale of apartments.

"Another reason for better growth is that there is an acute shortage of housing and a huge demand for apartments in the Rs 30-50 lakh range. Besides, every developer in the country is now looking at affordable housing, for which there is good demand," said Deepak Parekh, Chairman, HDFC.

However for the entire fiscal, HDFC's net profit declined by 6% to Rs 2,282.5 crore from Rs 2,436 crore, a year ago. Last year HDFC's profits were increased by exceptional gains from stake sales in HDFC's BPO arm Intelnet, its life insurance arm HDFC Standard Life and its non-life subsidiary HDFC Ergo General Insurance. If these gains are excluded, HDFC's net profit for the year increased by 23%.

The loan approvals during the last quarter increased by 16% to Rs 49,166 crore where the loan disbursements reported a hike of 21% to Rs 39,650 crores.

Renu Sud-Karnad, joint MD, HDFC informed that despite of the difficult times, the non-performing assets, on a 90-day basis, were down to 0.81% in FY09 compared to 0.84% in FY08.

Meanwhile Parekh said that the housing loan market, hit hard by a combination of factors including high interest rates, low loan availability and falling prices, saw some signs of improvement at the beginning of the new fiscal.