HDFC said profit after tax rose to 44.26 billion rupees ($541.09 million) for the three months ended March 31, from 37 billion rupees a year earlier.

Analysts, on average, had expected profit after tax of 38.86 billion rupees, according to Refinitiv IBES data.

The lender said it provided individual loans worth 93.40 billion rupees during the quarter, compared with 83.67 billion rupees a year earlier.

Demand for housing has surged after the pandemic, as a rising middle class looks to invest in real estate. Growth in home loans was seen predominantly in the mid-income segment and high-end properties, HDFC said.

Net interest income for the quarter grew 16% to 53.21 billion rupees. The lender, however, said income during the year was impacted by monetary policy and interest rate actions by the central bank.

The Reserve bank of India paused rate hikes in a surprise decision last month, after raising the repo rate by a total 250 bps since May last year.

Net interest margin for the year ended March 31 stood at 3.6%.

HDFC is on track to merge with India’s largest private lender HDFC Bank Ltd. The $40 billion merger is expected to conclude by July this year. The RBI in April allowed HDFC and HDFC Bank selective regulatory relief in order to smooth out the merger between the two entities.

Shares of HDFC were up 2.4% after results, compared with a 1.2% rise in the Nifty Financial index.