HUDCO's H1 FY26: Powering India's Infrastructure Growth with Record Performance

HUDCO, the Housing & Urban Development Corporation Limited, has delivered a stellar performance in the first half of fiscal year 2026 (H1 FY26), showcasing robust growth and strategic expansion. The public financial institution, a key player in India's urban and housing development, reported its highest-ever sanctions and loan book, underscoring its pivotal role in the nation's infrastructure push. For H1 FY26, HUDCO's net profit stood at INR1,340.06 Crore, marking a 7.51% increase from INR1,246.37 Crore in H1 FY25. Revenue from operations surged by 30.81% to INR6,156.34 Crore, up from INR4,706.07 Crore in the previous corresponding period. This strong financial showing reflects the company's effective strategy and the increasing demand for infrastructure financing across the country.

The company's operational performance highlights an unmatched growth trajectory. Loan sanctions for H1 FY26 reached INR92,985 Crore, a significant 21.59% increase over INR76,472 Crore in H1 FY25. Disbursements also saw a healthy rise, reaching INR25,838 Crore, up 19.07% from INR21,699 Crore. This marks the highest-ever half-yearly disbursement in HUDCO's history. The loan book expanded by 30% to INR1,44,554 Crore, demonstrating sustained momentum. The interest income also grew by 32.11% to INR6,122 Crore. These figures collectively paint a picture of a company firing on all cylinders, capitalizing on India's ambitious development agenda.

Strategic Initiatives and Market Positioning

HUDCO's strategic initiatives are closely aligned with the Government of India's vision for a $10 trillion economy by 2030 and 'Viksit Bharat' by 2047. The company is actively repositioning itself through several transformative moves. A significant step is the launch of a 'Dedicated Urban Invest Window', designed as a one-stop end-to-end support platform for Urban Local Bodies (ULBs). This initiative aims to enhance the bankability of infrastructure projects, provide capacity building, and assist in securing finance through innovative instruments like municipal bonds and multilateral agencies. The management expects this to be a catalyst for business volume growth, starting from capacity building and project preparation.

Furthermore, HUDCO is playing a promising role in the 'Urban Challenge Fund', which has a total corpus of INR1 Lakh Crore, with INR10,000 Crore allocated for 2025-26. HUDCO aims to finance up to 25% of bankable project costs under this fund, with a focus on driving financial and institutional reforms in ULBs. The 'Credit Enhancement Initiative' under AMRUT 2.0 is another key program, where HUDCO acts as the Credit Guarantee Fund Manager for a ₹300 Crore corpus, promoting financial self-reliance among smaller ULBs. These initiatives highlight HUDCO's commitment to sustainable asset creation and its deep integration with national development goals.

Diversification and Asset Quality

In a significant move to diversify its portfolio, HUDCO has launched a 'Private Sector Project Finance Division'. This division will commence lending against private sector projects in five key areas: Real Estate, Roads, Sea Ports, Airports, and Energy. This expansion, after a 12-year hiatus from private sector lending, is expected to bridge the funding gap in critical infrastructure sectors and contribute to the 'Viksit Bharat' vision. The management emphasized a stringent appraisal process for private loans, focusing on project bankability and investment-grade entities to maintain asset quality.

HUDCO's asset quality remains a competitive edge, with a Gross NPA of 1.21% and Net NPA of 0.07% in H1 FY26. The provision coverage ratio stands strong at 94.55%, reflecting robust risk protection. The company is committed to achieving zero Net NPA within 15 months, with aggressive efforts towards resolving distressed assets. The loan book is predominantly government-backed, with 98.71% of loans to government and its agencies, further bolstering asset quality. The company's superior liability management is evident in its ability to raise INR32,340.70 Crore in H1 FY26 at an average cost of 6.32%, leveraging a diversified mix of domestic and international borrowings.

Outlook and Investor Confidence

Management guidance indicates a continued growth trajectory, with the loan book expected to grow by 25-30%. The loan book is projected to reach INR1.6 Lakh Crore by March FY26, a revised upward target, and a long-term goal of INR3 Lakh Crore by FY2030. Net Interest Margins (NIMs) are expected to exceed 3.1% in Q3 FY26, driven by cost optimization and resolution of NPAs. The company's market capitalization has seen significant growth, rising over five times since March 2023 to INR44,768.49 Crore by September 30, 2025, reflecting strong investor confidence. HUDCO's strategic clarity, disciplined execution, and focus on national development priorities position it as a resilient and growing entity in India's financial landscape.