Housing & Urban Development Corporation LtdQ4 FY26Finance

Housing & Urban Development Corporation Ltd

Q4 FY26 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Order

Yes

Capex

Yes

2 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→HUDCO targets strong loan book growth with a CAGR of 15%-16% by 2030, aiming for INR 300,000 crores.
→Short-term growth projection is higher, with 30%-40% CAGR expected over the next 1-2 years.
→Loan book expected to grow to around INR 1.5 lakh crores by FY 26 from current levels.
→Growth is expected to be sustained primarily through urban infrastructure (60%) and affordable housing (40%).
→Robust pipeline with committed liabilities exceeding INR 1.2 lakh crores supports continued growth.
→Focus on multi-sector, multi-state lending, backed by government initiatives like PMAY 2.0 and infrastructure development plans.
→Management expects growth to moderate after 2 years but remain healthy and sustainable.
→Expansion driven by infrastructure financing aligned with government’s Viksit Bharat plan and increasing state-level competition.

Margin guidance

Category 3

→HUDCO expects robust loan book growth, targeting around INR 150,000 crores for FY26 and INR 300,000 crores by 2030, with an average CAGR of 15%-16%, potentially up to 20% in the next 3-4 years.
→Profitability has grown significantly, with a 40% profit increase last year; management is confident in sustaining a return on assets (ROA) around 2.4% to 2.5%.
→Net interest margins (NIMs) are maintained at around 3.2%, spreads approximately 2.4%, contributing to stable earnings growth.
→Operating expenses are expected to be managed efficiently or reduced due to retirements and new recruitments.
→Asset quality improvements and write-backs support profit sustainability.
→Management assures sustainable earnings growth driven by infrastructure financing opportunities aligned with government plans, with no expected requirement for equity infusion through 2030.
→EPS growth is expected to follow the profit growth trajectory with sustained financial health indicators.

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Fundraise plans

→HUDCO is continuously raising external commercial borrowings (ECBs) to diversify resources and reduce borrowing costs.
→Currently, around 17% of total borrowings come from ECBs and FCNR (B), with plans to increase this to about 20%.
→Recent funds were raised from the Japanese yen market providing interest rate arbitrage benefits.
→The weighted average cost of borrowing has reduced to around 6.8%.
→No equity infusion is expected in the medium term; by 2030, projections indicate no capital requirement due to strong CRAR (~47%) and increasing net worth.
→Debt-equity ratio and capital adequacy are well maintained, supported by a large portion of loans backed by state government guarantees, which carry lower risk weights.
→HUDCO plans to continue debt fundraising but no plans for new equity raising have been indicated.

Order book

Yes

→HUDCO's current committed liabilities (order book) stand at more than INR 1.2 lakh crores.
→The order book is continually growing as the company maintains a robust pipeline of projects.
→Sanctions have increased significantly from INR 18,000 crores to INR 92,000 crores on a quarterly basis.
→The company has been witnessing a continual growth trajectory in disbursements and loan book size.
→Loan book increased by 41% year-on-year from INR 84,000 crores to INR 118,000 crores as of Q3 FY25.
→The strong pipeline of projects supports continued loan growth and increasing order book size.

Capex plans

Yes

→HUDCO has signed an MoU for a major port development project near JNPT, valued around INR 25,000 crores, to be executed progressively over a couple of years.
→The company is focusing on growth in urban infrastructure and affordable housing, including the upcoming Pradhan Mantri Awas Yojana 2.0 starting next year.
→HUDCO plans significant capital expenditure projects in urban infrastructure segments like roads, urban mobility, water supply, sewage, metro, and energy.
→Loan book growth is targeted at INR 1.5 lakh crores by next fiscal and INR 300,000 crores by 2030, with a CAGR of 15%-16%.
→HUDCO is enhancing multi-sector financing including rural infrastructure and private sector funding as part of strategic expansion.
→No immediate equity capital infusion expected through 2030 due to strong capital adequacy (CRAR ~47%) and net worth growth.
→Investment in internal systems including IT upgrades and recruitment (65 new officers) to support these growth plans.

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