Investors will be watching whether Housing and Urban Development Corp. can sustain its earnings momentum after reporting a strong start to the financial year. The state-run housing finance and infrastructure lender expects healthy loan growth to continue, backed by rising demand for urban infrastructure financing, while also targeting improved margins and better asset quality.
Speaking to NDTV Profit, Hudco Managing Director and Chairperson Sanjay Kulshrestha said the company remains confident of achieving loan disbursements of around Rs 65,000 crore in FY27, driven by sustained demand for funding in the urban infrastructure segment.
Urban Infrastructure Demand Remains Strong
Kulshrestha said India's urban infrastructure requirements continue to create significant financing opportunities for Hudco, and the demand for debt capital is expected to remain robust over the coming years.
He said the company witnessed healthy growth in loan disbursements during the first quarter and expects the momentum to continue through the rest of FY27. The lender believes urban development projects will remain a key growth driver as governments and agencies continue investing in infrastructure.
Margins, Asset Quality To Improve
Hudco reported a strong first-quarter performance, with net profit rising 35% year-on-year, supported by higher net interest income, while total income also increased during the quarter. Although interest costs rose, the company was able to deliver healthy earnings growth through improved business volumes and operational performance.
Kulshrestha said Hudco's cost of borrowing has moderated to some extent, helped in part by the company's participation in the Reserve Bank of India's swap window facility. He added that the lender's superior asset-liability management continues to support profitability.
The company expects its net interest margin to improve from 2.72% to around 3% over time, aided by better funding costs and an improving loan mix.
On asset quality, Kulshrestha said Hudco expects further improvement and is confident of recovering 100% of the Rs 1,060.37 crore exposure, which accounts for 63.54% of its outstanding stressed assets across four accounts. The company has already made 100% provisioning against these accounts and expects resolution through the NCLT process.
With improving margins, stronger asset quality and continued demand for infrastructure financing, Hudco expects its growth trajectory to remain intact during FY27.
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