This article first appeared on GuruFocus .
Release Date: February 04, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Housing & Urban Development Corp Ltd ( NSE:HUDCO ) reported a 25% growth in its loan book, adhering to its guidance over the past two years.
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The company has successfully reduced its net non-performing assets (NPAs) to approximately 0.06%, indicating strong asset quality management.
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HUDCO is diversifying its asset base and borrower profile, aligning with the Reserve Bank of India's mandate to become an infrastructure finance company.
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The company has launched an 'Urban Invest Window' platform to streamline project creation, financial closure, and investor engagement, enhancing its role in urban development.
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HUDCO is actively participating in government initiatives like the Urban Challenge Fund, which aims to enhance project implementation capacity for urban local bodies.
Negative Points
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The company reported a net loss on fair value changes amounting to 470 crore due to FCNR borrowing, impacting its financial performance.
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Net interest margins have fallen to around 2.88% in the nine months of FY26, raising concerns about profitability.
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The debt-to-equity ratio is currently high at 7.28 times, indicating potential leverage risks.
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There is increased competition from commercial banks and other financial institutions in the infrastructure financing space.
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The company faces challenges in resolving remaining NPAs, with 1,600 crore of gross NPAs still unresolved, although efforts are ongoing.
Q & A Highlights
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Q: What is the plan regarding the FCNR borrowing, and will there be any future impact on costs? A: The impact of the FCNR borrowing is due to currency fluctuations, and this quarter will be the last with such an impact. From the next quarter, there will be no impact as we have decided not to take one-year FCNR loans. (Respondent: Unidentified_3)
Q: With the government's increased allocation to states, how will this affect HUDCO's business? A: The increased allocation is positive for HUDCO as it aligns with our focus on lending to states for infrastructure. This will support our growth in profit and loan book, as the government's push for urban infrastructure development will create more opportunities for us. (Respondent: Unidentified_3)
Q: What is the status of HUDCO's loan book growth and future profit projections? A: We are targeting a 3 lakh crore loan book by 2029, with a spread of about 2%. This growth is supported by government policies and capital infusion. We have signed MOUs worth 7 to 8 lakh crores, with a committed loan sanction pipeline of around 2.5 lakh crores. (Respondent: Unidentified_3)
Q: How is HUDCO addressing the resolution of NPAs? A: We have resolved around 500 crores of NPAs in the previous financial year and 385 crores in the current year. We are left with 1,600 crores of gross NPAs, with 800 crores under liquidation through NCLT. We aim to resolve most of them by the end of the next financial year. (Respondent: Unidentified_6)
Q: How does HUDCO plan to manage its debt-to-equity ratio amid growth? A: Our current debt-to-equity ratio is 7.28 times. We plan to improve this by issuing perpetual debt instruments qualifying as tier-one capital. We aim to bring it back to less than 6% in the next 2-3 months. (Respondent: Unidentified_6)
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
