Synopsis:
Housing & Urban Development Corporation is in focus as the management expects to reach 1.5 lakh crore loan book before the end of FY26. It was earlier guided, but now it expects to achieve this growth by Q3 FY26. It also cited that with time, return ratios and profitability will significantly improve.
The shares of this leading financier of housing and urban development activities are in focus as it laid out a strong guidance for its future. This uptick is mainly because of increased sanctions. In this article, we will discuss more about it in detail.
With a market capitalization of Rs 42,630 crore, the shares of Housing & Urban Development Corporation Ltd are currently trading at Rs 213 per share, representing a decline of 29 percent from its 52-week high of Rs 299.70 per share. Over the past five years, the stock has delivered an impressive return of 462 percent.
Management Guidance
Sanjay Kulshrestha, the Chairman and Managing Director (CMD) of Housing & Urban Development Corporation (HUDCO), recently shared that with India ramping up its infrastructure investment goals, the company is in a prime position to seize opportunities in various sectors like transport, ports, airports, energy, water, and waste management.
He mentioned that HUDCO’s impressive performance has led to an update in its loan book guidance. Initially, the company aimed for a loan book of Rs 1.5 lakh crore by FY26, but now it anticipates reaching that target sooner, likely by the third quarter of FY26.
HUDCO’s optimism stems from a significant increase in sanctions, which jumped from Rs 25,000 crore in FY23 to over Rs 1.27 lakh crore in FY25. This surge indicates a strong pipeline of capital-intensive infrastructure projects supported by state governments, providing the company with solid growth prospects in the years ahead.
Although the company experienced some short-term margin pressure in Q1 FY26, Kulshrestha is hopeful that margins will bounce back by the end of the year, projecting them to be around 3.2 percent to 3.3 percent.
Looking at the medium term, HUDCO expects to see a 25 percent annual growth in its loan book, driven by increased disbursements. Profitability is also on track to improve steadily, with the Return on Assets (ROA) expected to stabilize around 2.2 percent and the Return on Equity (ROE) estimated to hit between 15 percent and 17 percent.
In addition, HUDCO is undergoing a strategic shift, moving from being mainly a housing-focused lender to becoming a more diversified infrastructure financier. By FY26, the company aims for 75 percent of its loan book to be dedicated to urban infrastructure projects.
Also Read: 1:10 Bonus Issue: Stock in focus after company reports net profit of ₹7.43 Cr
Financial Highlights
HUDCO reported an interest income of Rs 2,925 crore in Q1 FY26, up by 34 percent from its Q1 FY25 interest income of Rs 2,179 crore. Coming to its profitability, the company reported a net profit growth of 13 percent to Rs 630.23 crore in Q1 FY26 as compared to Rs 557.75 crore in Q1 FY25.
Its loan book grew by 29 percent to Rs 1,34,410 crore in Q1 FY26. Additionally, it reported a GNPA of 1.34 percent in Q1 FY26 as compared to 3.42 percent in FY23, and NNPA stands at 0.09, which decreased from 3.42 percent in FY23. This highlights the company’s healthy asset quality performance.
Housing and Urban Development Corporation Limited (HUDCO) is a government-owned lender that finances housing and urban infrastructure projects in India. It supports sectors like housing, transport, power, water, waste management, and smart cities, along with commercial infrastructure. HUDCO also provides consultancy, research, and training services in urban planning and project management.
Written by Satyajeet Mukherjee
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
