Fundamental Analysis Of HUDCO: India’s urban development depends on housing and infrastructure, which are crucial for economic and societal progress. Providing affordable housing and robust infrastructure contributes to addressing the basic needs of the growing population and accelerates the country’s advancement. 

One such company that plays an important role in the development of the country’s infrastructure is HUDCO Limited. In this article, we will conduct a fundamental analysis of HUDCO and try to identify the company’s future potential.

Fundamental Analysis Of HUDCO

We’ll begin our Fundamental Analysis of HUDCO by becoming acquainted with the company’s operations and products. Following that, we’ll go into the stock’s financials. The article concludes with a highlight of future plans and a summary.

Industry Overview

Hudco logo Image

India’s growth is strongly supported by continuous investments in real estate, creating income and job opportunities that benefit various industries. 

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The government’s emphasis on ‘infrastructure-led economic growth’ was evident in the Union Budget 2023-24, with a 33% increase in capital investment for infrastructure, reaching ₹10 lakh crore, equivalent to 3.3% of the GDP.

Furthermore, an Urban Infrastructure Development Fund (UIDF) has been established which is managed by the National Housing Bank, utilizing priority sector lending shortfall. This fund aims to enhance urban infrastructure in Tier 2 and Tier 3 cities. 

Lastly, the Pradhan Mantri Awas Yojana (PMAY) has seen a 66% increase in allocation, reaching over ₹79,000 crore, reinforcing the government’s commitment to housing development.

Company Overview

Established in 1970, Housing and Urban Development Corporation Limited (HUDCO) is a public sector financial institution, in the field of housing and infrastructure development in the country. The company has been

The company facilitates long-term finance for the construction of houses for residential purposes or finances or undertaking housing and urban infrastructure development programs. The Housing finance is segregated into social housing, residential real estate and retail finance, which is branded as HUDCO Niwas.

Under urban infrastructure finance, the company facilitates loans for water supply, roads and transport, power, emerging sectors, industrial infrastructure, commercial infrastructure, social infrastructure, sewerage, drainage, solid waste management and others.

As of FY23, the company has a network of 21 Regional Offices and 11 Development Offices across India and established its presence in the major cities of each State and some other cities and union territories

The following image shows the geographical breakdown of the total outstanding loan portfolio of the company:

HUDCO Geographical Breakdown

Operational Highlights

Since its inception, the company has cumulatively sanctioned a total of 17,335 housing and urban infrastructure projects with a total loan of ₹2,36,555 crores and disbursements of ₹1,96,612 crores. 

Further, the Company has sanctioned financial assistance to more than 196.48 lakh housing units both in rural and urban areas in the Country, of which 1.87 crores (95.31%) pertains to EWS / LIG categories. 

In addition, under HUDCO Niwas, a retail lending window, the Company has cumulatively sanctioned financial assistance of ₹6,871 crore to 3.86 lakh individuals and released an amount of ₹5,178 crore

Fundamental Analysis Of HUDCO – Financials

Using the annual reports declared by the company, we will now conduct a fundamental analysis of HUDCO Limited.

Net Interest Income & Net Profit Growth

The financials of the company reported a total revenue of ₹7086.18 crores in FY23. This is a marginal increase in its revenue when compared to the total revenue of ₹6997.66 crores in FY22. With a reported revenue of ₹5,591.22 crores in FY19, the company’s total revenue has increased at a CAGR of 6.10% until the recent financial year.

On the other hand, there was a marginal decrease in the net profits of the company which decreased from ₹1,716.60 crores in FY22 to ₹1,701.62 crores in FY23. Overall, the net profit of the company has increased at a CAGR of 9.58% since FY19 which is better than the revenue growth

Financial YearTotal Revenue (Rs in Crores)Net Profit (Rs in Crores)
CAGR % (4 Years)6.10%9.58%

Margin Analysis

The company’s net interest margins were on a declining trend until FY22. In FY23, the net interest margins improved slightly and were reported at 3.19%. The NIM represents the net earnings of the company on the average interest-earning assets. The company reported the highest net profit margins during FY22 which were at 24.68%. During FY23, these margins have slightly reduced and were at 24.14%.

The table below shows the net interest margins and net profit margins of HUDCO Limited for 5 financial years:

Financial YearNet Interest MarginNet Profit Margin
2022-233.19%24.14 %
2021-223.13%24.68 %
2020-213.26%21.82 %
2019-203.65%22.68 %
2018-194.52%21.24 %

Non-Performing Assets (NPAs)

During FY23, a Gross NPA of ₹2,759.17 crores was reported, constituting 3.42% of the company’s total loan portfolio. After accounting for the provisions set against GNPAs, the company reported a Net NPA ₹407.25 crores which constitutes 0.52% of the Net loan outstanding.

During FY23, the NPAs have slightly increased to 0.52% (3.42% in FY22) while the GNPAs reduced to 3.42% (3.58% in FY22). This is a result of a reduction in the provision coverage from 86.20% in FY22 to 85.24% in FY23.

Financial YearGross NPA (%)Net NPA (%)

Return Ratios

Talking about to the return ratios, the company reported a ROA of 2.13% in FY23 which has decreased slightly compared to the previous financial years. The ROA represent the returns the company has earned on its total assets.

During FY23, the company reported an ROE of 11.02% which is lower than the average return expected on the capital invested by the shareholders. The table below shows the RoA & RoE of HUDCO limited for 5 financial years:

Financial YearRoA (%)RoE (%)

Fundamental Analysis Of HUDCO- Future Plans

  • The company is emphasizing expanding its focus on urban infrastructure and social housing.
  • The company is focusing on sanctioning loans to state governments and their agencies. This will help them avoid the credit risk of private sector entities.
  • The company is expanding its geographical footprint in smaller cities to cater to the increasing financing requirements and needs.
  • The company will continue to participate in the implementation of government housing and urban infrastructure programmes such as DAY-NULM, Smart Cities Mission, AMRUT, Jal Jeevan Mission and PMAY-HFA (Urban), among others.
  • The company aims to raise funds from different sources with an aim to reduce the incremental cost of borrowings.

Key Metrics

CMP₹ 187.2Market Cap (Cr.)₹ 25,153 Cr
Price to book value2.51Stock P/E21.8
Promoter Holding75.2 %Provision coverage ratio85.24%
NIM3.19%NPM24.14 %


We have come to an end with the article on ‘Fundamental Analysis Of HUDCO’. On a closing note, we can say that with the government’s emphasis on housing and infrastructure development coupled with the company’s strong financials and future plans, the growth looks favorable . What might be the future of HUDCO? What is your view on the company? Let us know in the comments section below.  

Written by Aaron Vas

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