Housing and Urban Development (HUDCO) Q2 25/26 earnings summary

Executive summary

• Achieved record six-month sanctions of INR 92,985 crore in H1 FY26, a 22% year-over-year increase from INR 76,000 crore.

• Disbursements grew 19% year-over-year to INR 26,000 crore in H1 FY26, with the highest ever half-yearly disbursement at ₹25,838 crore.

• Loan book expanded by 15.8% in H1 FY26, reaching INR 1.44 lakh crore, nearing the revised FY26 target of INR 1.5 lakh crore.

• Over five decades of expertise as a techno-financial institution, supporting housing and infrastructure projects nationwide.

• Listed entity with 75% government ownership, recognized as a Navratna CPSE and NBFC-IFC.

Financial highlights

• Net profit for H1 FY26 rose 7.5% year-over-year to ₹1,340.06 crore.

• Revenue from operations rose 31% year-over-year to INR 6,100 crore in H1 FY26; total income reached ₹6,196.49 crore.

• Weighted average cost of funds declined from 7.45% to 7.12%, with new borrowings at 6.32%.

• Dividend payout ratio at 41.5% for FY25, with interim dividend of ₹2.15/share up to H1FY26 and a second interim dividend of ₹1 per share for FY26.

• Market capitalization grew fivefold since Mar'23, reaching ₹46,720 crore with a P/E ratio of 16.8.

Outlook and guidance

• Loan book growth guidance maintained at 25%-30% annually, targeting INR 1.6 lakh crore by March 2026 and INR 3 lakh crore by FY30.

• Positioned to benefit from India's infrastructure capex surge, projected to grow 1.6x over FY26-30.

• NIM expected to improve to above 3.1% in H2 FY26, aided by lower cost of funds and anticipated repo rate cuts.

• Strategic focus on supporting government initiatives like PMAY 2.0, Smart Cities, and AMRUT.

• Expanding into private sector project finance and urban infrastructure through new dedicated divisions.