Housing and Urban Development Corporation Limited (HUDCO) has received a vote of confidence from CARE Ratings, which has reaffirmed its credit ratings across multiple instruments. This reaffirmation underscores HUDCO's robust financial health and strategic importance in India's housing and urban infrastructure financing sector.

Key Rating Highlights

CARE Ratings has maintained its 'CARE AAA: Stable' rating for HUDCO's long-term and short-term bank facilities worth ₹80,000 crore, as well as for various bonds. The rating agency has also assigned ratings to new perpetual debt instruments, further solidifying HUDCO's strong market position.

Financial Performance

HUDCO's financial performance has shown remarkable strength, as evidenced by the following key metrics:

The capital adequacy ratio of 38.03% remains well above the regulatory minimum, despite a slight decrease from the previous year. This robust capitalization provides HUDCO with a strong buffer against potential risks.

Strategic Importance and Government Support

HUDCO's strategic importance is underlined by the Government of India's majority stake of 75%. This backing from the government not only provides financial stability but also positions HUDCO as a key player in implementing various government initiatives in social housing and urban infrastructure development.

Asset Quality and Profitability

The company's asset quality has shown improvement, with net non-performing assets (NNPA) decreasing to 0.07% from 0.25% in the previous period. This reduction in NPAs reflects HUDCO's effective risk management practices.

Profitability remains healthy, with a return on total assets of 1.90% for the reported period. The net profit stood at ₹709.80 crore, marking a 3.08% increase from the same period last year.

Growth and Expansion

HUDCO's balance sheet has shown significant growth, with total assets increasing by 37.54% year-on-year to ₹128,495.60 crore. This expansion is indicative of HUDCO's increasing role in financing urban infrastructure and housing projects across India.

Outlook

The stable outlook assigned by CARE Ratings reflects expectations that HUDCO will maintain its strategic importance to the Government of India while continuing to demonstrate healthy profitability, capitalization, and asset quality.

As HUDCO continues to play a pivotal role in India's urban development landscape, its financial strength and government backing position it well to capitalize on opportunities in infrastructure financing and contribute significantly to the nation's growth story.

Japan Credit Rating Agency (JCRA) has reaffirmed HUDCO 's BBB+ rating for both Foreign Currency and Local Currency Long-term Issuer Ratings, maintaining a stable outlook. This affirmation underscores HUDCO's strong government ties and its strategic importance in India's housing and urban development sectors.

Key Highlights

• HUDCO's ratings reflect its role as a nodal agency for government housing schemes
• Robust loan portfolio growth of 35% year-on-year
• Record financial performance with consolidated revenue of INR 103.48 billion and net profit of INR 27.09 billion

Financial Performance

HUDCO's financial performance has shown significant improvement, as evidenced by its latest income statement data:

The company's EBITDA for FY 2025 stood at INR 10,394.80 crore, representing a substantial increase of 33.03% from the previous year.

Balance Sheet Strength

HUDCO's balance sheet reflects its growing operations and strong financial position:

The significant increase in total assets and investments highlights HUDCO's expanding role in the housing and urban development sectors.

Strategic Importance and Government Support

JCRA's rating affirmation is based on several key factors:

1. Strong government ties: HUDCO maintains close integration with the Government of India, underpinned by its designation as a de facto implementing agency for government-led projects.

2. Critical role in policy implementation: The company plays a highly significant role in the government's housing promotion policy and urban development initiatives.

3. Nodal agency status: HUDCO serves as a nodal agency for PMAY-U (Pradhan Mantri Awas Yojana-Urban), a key government housing scheme.

4. Navratna status: In 2024, HUDCO was granted Navratna status, the second-highest category among public-sector enterprises, providing greater autonomy for strategic investments.

Loan Portfolio and Credit Quality

HUDCO's loan portfolio has shown robust growth, driven by strong demand for housing and urban development:

• Outstanding loans increased by 35% year-on-year in FY 2025
• Approximately 90% of the portfolio is guaranteed by central and state governments
• Non-performing loan ratio has been declining, standing at 1.67% on a gross basis and 0.25% on a net basis as of FY 2025

Outlook

The stable outlook on HUDCO's ratings reflects JCRA's expectation that the company will maintain its strategic importance to the government and continue its strong financial performance. With numerous urban development projects ongoing across India, HUDCO's business expansion is expected to persist in the coming years.

As HUDCO continues to play a crucial role in India's housing and urban development sectors, its financial strength and government support position it well for future growth and stability in its credit ratings.