Today, we recommend two stocks, both from the financial sector, as recommended by the Trade Brains Portal, to buy for an upside potential of more than 39%. The financial services sector is vital to India’s economic development, acting as the primary engine for converting domestic savings into productive investments. We also analysed the market’s performance on Tuesday to understand what may lie ahead for the stock indices in the coming days.
1. IREDA Ltd
- Current price: Rs 154.52
- Target price: Rs 215
- Upside: 39%
- Time frame: 12 Months
To view the report for the stock mentioned above or explore other stock recommendations, click here
Why It’s Recommended
Founded in 1987, IREDA is India’s largest non-banking financial company (NBFC) with over 38 years of experience and holds the prestigious ‘Navratna’ status. It provides a comprehensive range of financial services to the renewable energy sector, covering solar, hydro, wind, transmission, battery storage, green hydrogen, EV charging infrastructure, project-term loans, and loan refinancing. The company operates across 23 states and 4 union territories in India, with a well-diversified loan portfolio. IREDA is 71.76% owned by the Government of India, positioning it as a crucial player in the country’s renewable energy growth.
For Q2 FY26, IREDA reported a revenue from operations of Rs 2,057 crore, a 26% increase YoY, with a profit after tax (PAT) of Rs 549 crore, also up 42% YoY. It disbursed Rs 15,043 crore in loans, reflecting a 54% growth YoY, while Rs 33,148 crore was sanctioned, a 86% increase.
The company’s Net Interest Margin (NIM) stood at 3.72%, up 38 basis points from the previous year and 12 basis points from Q1 FY26. The yield on advances was 9.87%, and the cost of borrowing was controlled at 7.24%. IREDA improved its asset quality, with net non-performing assets (NPAs) decreasing from 2.06% in Q1 FY26 to 1.97% in Q2 FY26.
As of Q2 FY26, the outstanding loan book was Rs 84,477 crore, with the solar thermal sector representing the largest share (24%), followed by wind (12%) and hydropower (10%). The private sector contributed 72% of the loan book, while 28% came from the public sector. In H1 FY26, IREDA raised Rs 10,138 crore in borrowings, with total outstanding at Rs 69,920 crore as of Q2 FY26.
IREDA raised JPY 26 billion ECB facility from SBI Tokyo and Rs 2,458.9 crore through Qualified Institutional Placement (QIP). The company also received approval from the Ministry of Finance for issuing 54EC Bonds.India’s renewable energy sector has expanded significantly, tripling in size over the past decade. India attained a remarkable Non-fossil fuel capacity of 243 GW, with a target of 500 GW by 2030.
Risk Factors
IREDA is vulnerable to interest rate fluctuations, which could negatively impact its business, hedging strategies, net interest income, and margins. A decline in its net interest margin could harm its financial performance and overall business operations.
2. Housing and Urban Development Corporation Ltd
- Current price: Rs 225
- Target price: Rs 295
- Upside: 31%
- Time frame: 14-16 months
To view the report for the stock mentioned above or explore other stock recommendations, click here
Why it’s recommended
HUDCO is a key player in India’s housing and urban development sector, serving as the nodal agency for the government’s ‘Housing for All’ initiative. It also supports programs such as the Jal Jeevan Mission and Pradhan Mantri Awas Yojana, offering financing and consultancy for projects under these schemes. In FY25, HUDCO reported impressive growth in both loan approvals and disbursements. Loan sanctions surged by 55.31%, reaching Rs 1,27,952 crore, while disbursements jumped 122.59% to Rs 40,038 crore. Interest income grew by 33%, reaching Rs 10,200 crore, up from Rs 7,653 crore in FY24.
The company’s net interest margin (NIM), including the external benchmark rate (EBR), held steady at 3.22% in FY25, compared to 3.18% the previous year. Management anticipates an NIM range of 3.25%-3.3% for the next two years. HUDCO’s debt-to-equity ratio rose to 5.72x in FY25, up from 4.05x in FY24. However, the cost of funds improved, falling by 35 basis points to 6.75% from 7.1%, thanks to strategic market timing and diversified funding sources.
The company showed notable improvement in asset quality, with the gross non-performing asset (GNPA) ratio decreasing to 1.67% in FY25, down from 2.71% in FY24. The net non-performing asset (NNPA) ratio also improved to 0.25% from 0.36%. HUDCO’s provision coverage ratio remained strong at 85.44%. The company has committed to resolving all NPAs within the next 18 months, expecting to recover Rs 400-Rs 500 crore from NPA settlements in FY26.
In Q1 FY26, HUDCO saw strong performance, with loan sanctions growing 143% quarter-on-quarter (QoQ) to Rs 34,224 crore, up from Rs 14,097 crore in Q1 FY25. Loan disbursements grew 1.48% QoQ to Rs 12,812 crore, and loan outstanding rose by 30% QoQ to Rs 1,34,410 crore. Interest income also grew by 34% QoQ to Rs 2,925 crore. Looking ahead, HUDCO has set long-term targets of a Rs 3 lakh crore loan book by 2030 and Rs 1.5 lakh crore by FY26.
For FY25, HUDCO’s board approved a final dividend of Rs 1.5 per share, resulting in a total dividend payout of Rs 4.15 per share after factoring in two interim dividends (Rs 2.05 and Rs 1.05 per share), reflecting a dividend payout ratio of 41.50%.
Risk Factor
HUDCO’s credit exposure is heavily linked to state governments and public sector entities. The company is under scrutiny to reduce exposure within deadlines, as mandated by regulators. Non-compliance or violation of Fiscal Responsibility and Budget Management (FRBM) norms could lead to penalties and higher capital requirements. Additionally, HUDCO faces intense competition from banks and financial institutions that benefit from lower-cost funding due to CASA (current and savings account) deposits.
Market Recap-14th October 2025
On Tuesday, the Nifty 50 opened lower at 25,177.30, down -108.05 points from its previous close of 25,285.35. The index hit an intraday low of 25,060.55, dropping below the 25,100 level, before closing at 25,145.50, down -81.85 points, or -0.32%. Despite the decline, the index remained above all key moving averages (20/50/100/200-day EMAs) on the daily chart, indicating some technical support.
The BSE Sensex mirrored the Nifty’s trend, opening at 82,049.16, down -451.66 points from the previous close of 82,500.82. It followed a similar pattern, closing at 82,029.98, a drop of -297.07 points, or -0.36%. Both indices showed moderate momentum, with RSI values for Nifty 50 at 55.39 and Sensex at 54.31, well below the overbought threshold of 70.
All the major indices remained negative on Tuesday. The Bank Nifty Index ended lower, falling -128.55 points, or -0.23%, to 56,496.45. The drop was mainly due to the weekly F&O expiry, negative global cues, rising crude oil prices, worsening US-China trade relations, and mixed Q2 earnings, all weighing on investor sentiment.
The Nifty PSU Bank Index was the biggest loser, falling -1.52%, or -117.45 points, to 7,596.50. Stocks like Bank of Maharashtra, UCO Bank, Indian Overseas Bank, and Central Bank of India saw declines of up to -4.29%. The Nifty Consumer Durable Index also posted a significant drop, declining -1.08%, or -412.05 points, to 37,850.70.
Key stocks like Dixon Technologies, Century Plyboards, PG Electroplast, and Bata India fell by up to -3.26%. The Nifty Media Index followed the negative trend, closing at 1,547.25, down -1.03%, or -16.10 points. Stocks like Nazara Technologies dropped -2.18%, while other media stocks such as Tips Music Ltd, Sun TV Network, Network 18 Media, and Hathway Cable saw losses of up to -2.12%.
Asian markets followed a negative sentiment as well. Japan’s Nikkei 225 dropped -3.03%, losing -1,415.80 points, to close at 46,673.00. Hong Kong’s Hang Seng fell by -1.81%, closing at 25,428.00, while China’s Shanghai Composite dropped -0.63%, to 3,865.23. Similarly, Singapore’s Straits Times Index declined -0.81%, ending at 4,354.52, and South Korea’s KOSPI was down -0.64%, closing at 3,561.81. At 4:42 p.m. IST, U.S. Dow Jones Futures were also lower, down -0.58%, at 45,802.86, a drop of -268.70 points.
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