HUDCO’s Q3 FY26 earnings call highlighted a 25% growth in the loan book, a reduction in the cost of funds, and diversification into infrastructure finance. Net NPAs are near zero at 0.06%. The company launched an urban invest window and is focused on supporting the government’s Viksit Bharat initiative. The call discussed financial performance, NPA resolution, and future growth strategies, including targeting a ₹3 lakh crore loan book by 2030.
Financial Highlights
HUDCO reported a 25% growth in its loan book and is actively working to reduce its cost of funds and diversify its assets. The company has nearly resolved its NPA assets, bringing net NPAs down to approximately 0.06%.
Strategic Initiatives
HUDCO launched an urban invest window to streamline project creation, financial closures, and investor engagement. The company is also focused on supporting the Government of India’s Viksit Bharat initiative. The company aims to achieve a loan book of ₹3 lakh crore by 2030.
FCNR Impact and ECB Hedging
The company experienced a ₹470 crore loss due to FCNR borrowing fluctuations, but this impact is expected to be resolved by the next quarter. All ECBs are 100% hedged.
Government Support and Initiatives
The government has increased funding to states by 33%, which is expected to positively impact HUDCO. The SASCI loans extended by the Government of India have increased to ₹2 lakh crore.
Loan Book and Disbursement
HUDCO has a committed loan sanction pipeline of approximately ₹2.5 lakh crore. Sanctions in the current year amounted to around ₹1.4 lakh crore. The company targets disbursements of around ₹50,000 crore for the financial year, maintaining a NIM of around 3% to 3.1%. Repayments are approximately ₹17,000 crore to ₹18,000 crore per annum.
NPA Resolution
HUDCO has resolved approximately ₹385 crore of NPAs in the current financial year, reducing gross NPAs to around ₹1,600 crore. The company expects to resolve most remaining NPAs by the end of the next financial year.
Infrastructure Projects
HUDCO is involved in metro projects (e.g., Indore, Bhopal), airport funding in Andhra Pradesh and Kangra, water supply schemes, and desalination projects in Tamil Nadu. They are also funding transit-oriented developments in Chennai and various highway projects.
Debt-to-Equity Ratio
The debt-to-equity ratio is currently at 7.28x. The company plans to improve this ratio and aims to bring it below 6 in the next 2 to 3 months through perpetual debt instruments.
PMAY 2.0
PMAY 2.0 is gradually picking up, with states starting to conduct assessments in a structured way. A majority of the states in the Northern sector have already started participating.
Source: BSE
