the countrys largest housing finance company has delivered a consistent 20 rise in profits for the quarter ended september 2011 the profits were slightly higher than market expectations because of revenue from sale of hdfcs stake in intelenet coming in during the quarter in an interview with mayur shetty keki mistry vice chairman and ceo seeks to dispel concerns that rising interest rates will scare borrowers and increase bad loansdo you think reserve bank of india will raise rates again in october it is my personal opinion that rbi will raise interest rates by a quarter of a percentage point for the simple reason that inflation has not come down we have seen yields on government securities moving up and any increase in interest rates will have an impact on our cost of funds our lending rates will depend on the extent to which we are able manage our cost of funds we always look at the impact of any increase in rates on our cost of funds before increasing our lending rates if we can absorb an increase in rates we will not necessarily increase lending rates for example in june when rbi raised rates by 25 bps we did not increase our lending rates as we could absorb the hike our margins have come down marginally from 232 a year ago to 229 in the last quarter our margins were marginally higher at 23do you think demand for home loans will come down with increase in interest rates i do not think so those buying houses for their own use will not try to time the interest rates because they know that in a 15year period rates will rise and fall our loans have grown by 20 the high end properties in south and central mumbai are currently seeing a slowdown but outside this we are seeing a growth everywhere our average loan size has gone up only marginally from rs 186 lakh last year to rs 19 lakh which is an indication that the demand is for affordable homesthere are concerns that increase in interest rates would lead to a rise in bad loans it all depends on whom you have advanced loans to our nonperforming assets have recorded decline for 27 consecutive quarters these 27 quarters which is nearly seven years have seen interest rates on home loans rise and fall several times despite this there has been no change in the npa positionthere are loans that developers are under pressure what about the developers that hdfc has an association with it is true that some smaller builders are facing a cash crunch but the good news is that developers are not as leveraged as they were in recent years our exposure to developers has not changed and continues to be in the range of 12 to 13 of our loansthis quarter has seen an increase in the profits on sale of investments are there any core investments you have sold profit on sales of investments