HUDCO Reports Robust Q1 FY26 Performance with 30% Loan Book Growth and Improved Asset Quality

HUDCO has delivered a strong performance in the first quarter of fiscal year 2026, with significant growth in its loan book and improved asset quality.

Loan Book Growth and Financial Performance

HUDCO's loan book grew by an impressive 30% year-on-year, reaching Rs 1.34 lakh crore. The company reported a 34% increase in revenue and a 13% rise in net profit compared to the same quarter last year. This growth trajectory puts HUDCO on track to potentially exceed its previously set target of Rs 1.5 lakh crore loan book by Q3 FY26.

Asset Quality Improvement

The company's asset quality saw notable improvement, with gross non-performing assets (NPAs) declining from 1.67% to 1.34%. More significantly, net NPAs reduced to slightly less than 0.1%, positioning HUDCO close to its goal of becoming a zero net NPA company within the next 16 months.

Sanctions and Disbursements

Sanctions surged by 143% quarter-on-quarter to Rs 34,000 crore, while disbursements reached an all-time high of Rs 12,800 crore. The company maintains a strong sanction pipeline of over Rs 1.5 lakh crore, which is expected to support disbursements over the next 3-4 years.

Financial Metrics

Metric	Value
Net Interest Margin (NIM)	2.94%
Return on Equity	14.28%
Debt-to-Equity Ratio	5.93x

The company expects NIM to cross 3% in the upcoming quarter. HUDCO's healthy debt-to-equity ratio provides ample room for further growth.

Borrowing Strategy and Cost of Funds

HUDCO has successfully reduced its cost of funds, with recent borrowings of around Rs 20,000 crore at an average rate of 6.32%. The company's strategic approach to borrowing, including a mix of bank loans, bonds, and international commercial borrowings, has contributed to this cost efficiency.

Expansion into New Sectors

HUDCO is expanding its focus beyond housing to infrastructure financing, including:

Metros
Water projects
Roads
Private sector funding (with guidelines for roads and real estate)

The company is also preparing to engage in urban infrastructure projects under the recently announced Urban Challenge Fund.

Future Outlook

Management expressed confidence in overachieving its FY26 guidance, with a long-term target of reaching a Rs 3 lakh crore loan book by FY30. The company is well-positioned to capitalize on the growing infrastructure needs across various states and sectors in India.

Challenges and Opportunities

While HUDCO faces challenges such as potential forex volatility and the need for careful treasury management, the company sees significant opportunities in the infrastructure and urban development sectors. The implementation of PMAY 2.0 and the Urban Challenge Fund are expected to provide additional growth avenues in the coming quarters.

HUDCO's strong Q1 FY26 performance and strategic initiatives position it well to capitalize on India's growing infrastructure and urban development needs, with management expressing optimism about exceeding their previously set targets for the fiscal year.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-0.59%	-0.50%	-3.56%	-1.99%	+13.19%	+585.35%

Housing and Urban Development Corporation Ltd (HUDCO), a leading public sector enterprise in housing and urban infrastructure financing, has reported robust growth in its loan book and sanctions for the first quarter.

Record Loan Book and Sanctions

HUDCO achieved a milestone with its loan book reaching ₹1.34 lakh crore, marking a significant expansion in its lending portfolio. The company also reported impressive sanctions of ₹34,224 crore in Q1, showcasing a strong start to the fiscal year.

Strategic Partnerships and Future Growth

The company has signed Memorandums of Understanding (MOUs) worth ₹3.5 lakh crore for infrastructure and housing projects, indicating a robust pipeline for future growth. These agreements underscore HUDCO's commitment to supporting India's urban development and housing needs.

Focus on Government Initiatives

HUDCO is aligning its strategy with key government programs to drive lending growth in the coming years. The company is particularly focusing on:

PMAY 2.0 (Pradhan Mantri Awas Yojana 2.0)
Smart Cities Mission
Urban Challenge Fund initiatives

These initiatives are expected to create significant opportunities for HUDCO in the housing and urban infrastructure sectors.

Financial Performance

For the quarter ended June 30, HUDCO reported the following financial highlights:

Metric	Value (₹ crore)
Revenue from operations	2,937.31
Total income	2,945.47
Profit before tax	857.23
Net profit	630.23
Earnings per share	3.15

Note: Earnings per share is not annualized

Asset Quality and Capital Adequacy

HUDCO maintained a strong asset quality with:

Metric	Percentage
Gross Credit Impaired Assets Ratio	1.34%
Net Credit Impaired Assets Ratio	0.09%
Provision Coverage Ratio	93.49%

The company's Capital to Risk-weighted Assets Ratio (CRAR) stood at a robust 41.72%, indicating a strong capital position.

Dividend Declaration

The Board of Directors declared a first interim dividend of ₹1.15 per equity share (11.50% on the face value of ₹10 each) for the financial year.

HUDCO's strong performance in Q1 reflects its pivotal role in India's urban development landscape. With its focus on government initiatives and a healthy project pipeline, the company is well-positioned for sustained growth in the coming years.