Housing and Urban Development Corporation Limited (HUDCO) announced its Q2 FY27 results, highlighting a 37% year-on-year increase in loan disbursements, reaching over INR35,000 crores in the first half of the fiscal year. The company’s loan book grew by 29% to INR1.86 lakh crores, with revenue from operations up by 26%. Net profit saw a 31% increase. Management expressed confidence in sustaining spreads at 2% and Net Interest Margins (NIMs) at 3%.
HUDCO Reports Strong H1 FY27 Performance
Housing and Urban Development Corporation Limited (HUDCO) has announced robust financial results for the first half of the Financial Year 2027 (H1 FY27), demonstrating sustained business momentum and improved operational efficiency. The company reported a significant 37% increase in loan disbursements compared to the previous financial year, reaching an aggregate of over INR35,000 crores during H1 FY27. The loan sanction amount also surpassed INR1 lakh crore.
Loan Book and Revenue Growth
HUDCO’s loan book experienced substantial growth, expanding by 29% to stand at INR1.86 lakh crores. Complementing this growth, revenue from operations saw an increase of 26%. The net profit for the half-yearly period also rose by 31%, reflecting the company’s enhanced profitability and operational effectiveness.
Asset Quality and Financial Ratios
The company continues to focus on improving its asset quality, with Gross NPA declining to approximately 0.7% and Net NPA remaining just above zero at 0.04%. HUDCO is committed to achieving zero Net NPA in the near future. Financial ratios are reported to be well under control, supported by the government’s backing as a 75% owned entity of the Government of India.
Funding Strategy and Cost Optimization
HUDCO is actively pursuing a strategy to optimize its cost of funds. Measures include leveraging the RBI swap window and diversifying funding sources, both domestically and internationally. The blended cost of funds has remained stable at around 7.07%, despite turbulent market conditions and rising interest rates. The company is also working on improving its borrowing mix to strengthen its competitive edge and protect margins.
Focus on Urban Infrastructure Development
The company’s growth is intrinsically linked to the Government of India’s focus on urban infrastructure development and the creation of ‘Viksit Bharat’ (developed India). HUDCO is playing a pivotal role in financing various urban missions and programs, including housing for all (PMAY), water supply (AMRUT), Smart Cities Mission, and mobility initiatives like metro rail and rapid transit. The urbanization pace in India is rapid, with the urban population projected to double by 2050, presenting significant opportunities for HUDCO.
PPP Projects and Future Outlook
HUDCO is actively involved in financing Public-Private Partnership (PPP) projects, including infrastructure development, redevelopment of slums like Dharavi, and the road sector. While disbursements for some PPP projects have not yet commenced, the company has sanctioned approximately INR9,000 crores in PPP projects. Management anticipates maintaining spreads at approximately 2% and NIMs at around 3%, with a conservative approach to risk and competitive financing for good projects.
Management Commentary
During the earnings call, the management expressed confidence in the company’s strategic direction, emphasizing repurposing HUDCO to be a primary player in guiding urban infrastructure development. They highlighted efforts in strengthening internal capabilities, enhancing resource management, and optimizing loan pricing. The company is also exploring asset monetization and setting up a strategic business group to adapt to the evolving urban landscape.
Source: BSE
