HUDCO has received the highest credit rating of AAA with stable outlook from Acuite Ratings for its Rs 4500.00 crore Perpetual Additional Tier 1 Bonds. The rating assignment was communicated through a press release dated February 6, 2026, highlighting the company's strong financial position and strategic importance to the Government of India.

Rating Details and Rationale

The rating reflects HUDCO's position as a strategically important government-owned financial institution, with the Government of India holding a 75% stake as of September 30, 2025. Acuite Ratings emphasized the company's role as the nodal agency for key government programmes in affordable housing and urban development projects across India.

Strong Financial Performance

HUDCO demonstrated robust financial growth across key metrics during FY2025. The company's profitability showed significant improvement with net interest income increasing from Rs 2722.29 crore in FY2024 to Rs 3482.31 crore in FY2025.

Improved Asset Quality

The company's asset quality showed marked improvement during FY2025, with both gross and net non-performing assets declining substantially. The collections efficiency remained strong at 98.13% as of March 2025.

Strategic Growth Plans and Market Position

HUDCO has outlined ambitious growth plans including the development of 25 smart cities within the next 5 years. The company aims to reach around Rs 3 lakh crore loan book from the overall national infrastructure space of Rs 111 lakh crore by FY2030. Planned disbursements for the end of FY2026 are targeted at Rs 52,000 crore, representing continued strong growth momentum.

The rating agency noted that HUDCO's diversified resource profile and access to funding through bonds, banks, and financial institutions supports its growth strategy. The average cost of funds stood at 7.45% in FY2025, which compares favorably with other public financial institutions.

Key Rating Considerations

While the rating reflects strong fundamentals, Acuite Ratings highlighted certain areas of focus. The loan book shows high concentration with the top 20 exposures accounting for 79% of the portfolio. The company's gearing increased to 5.97 times in FY2025 from 4.45 times in FY2024, though this remains within acceptable limits given the growth trajectory.

The stable outlook indicates that Acuite expects HUDCO to maintain its strong market position and financial performance. Key rating sensitivities include the company's ability to control slippages on vulnerable assets, expand its loan book profitably, and maintain adequate capitalization levels.

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HUDCO has delivered a strong financial performance for the quarter and nine months ended December 31, 2025, showcasing significant growth across key operational metrics. The Navratna CPSE and infrastructure finance company demonstrated robust business expansion with substantial increases in revenue and lending activities.

Financial Performance Overview

The company's operational performance for the nine-month period reflects strong business momentum across all major parameters:

Quarterly Results Analysis

For the quarter ended December 31, 2025, HUDCO maintained consistent performance with total income from operations reaching ₹3,431.20 crore compared to ₹2,760.23 crore in the corresponding quarter of the previous year. The company reported net profit after tax of ₹713.00 crore for Q3FY26, compared to ₹735.03 crore in Q3FY25.

Earnings Per Share and Capital Structure

The company's earnings per share (EPS) performance demonstrates stable returns for shareholders:

Dividend Declaration and Corporate Actions

The Board of Directors has approved an interim dividend of ₹1.15 per share of face value ₹10 each for FY2025-26. The record date for determining shareholder eligibility for the third interim dividend has been fixed as February 7, 2025, with payment to be made within 30 days of declaration.

Business Operations and Strategic Position

As an NBFC-Infrastructure Finance Company, HUDCO continues to play a crucial role in financing infrastructure development for Viksit Bharat. The company's substantial growth in loan sanctions and disbursements reflects strong demand for infrastructure financing and the company's enhanced market position.

The financial results were reviewed by the Audit Committee and approved by the Board of Directors in their meeting held on January 29, 2025. The results have also been reviewed by the company's statutory auditors, M/s SAKS & Associates, Chartered Accountants, ensuring compliance with regulatory requirements and maintaining transparency in financial reporting.