HDFC has posted an increase in net profit of 20 percent in the second quarter backed by increased income from operations and profit on sale of investments for the firm.

The country's largest mortgage lender said that its net profit increased to 9.71 billion rupees from 8.08 billion int eh year ago period and its Income from operations rose to 40.77 billion rupees from 29.07 billion rupees in the second quarter last year.

The profit on sale of investment for the banking firm stood at 868.8 million rupees at a time when its net interest margin was at 4.3 percent. The total loan also increased to 1.27 trillion rupees as of 30 September.

HDFC expects the demand for home loans to increase as the income levels in the middle class is rising and the loan penetration in the country is still very low. Keki Mistry, vice chairman of HDFC said that he does not expect the interest rate change to affect loan take-up in the country.

HDFC competes with the likes of State Bank of India, ICICI bank and others fo0r market share in the mortgage loan market in India.