HUDCO's Q3 FY26: Powering India's Urban Future with Robust Growth

HUDCO, the Housing and Urban Development Corporation Limited, a Navratna CPSE, has delivered a robust performance in the third quarter and nine-month period ending December 31, 2025 (9M FY26). The company, a pivotal player in financing India's urban and housing infrastructure, reported a significant increase in its loan book, surpassing its own targets, alongside strong operational metrics. This performance underscores HUDCO's strategic alignment with the Government of India's vision for 'Viksit Bharat' and its expanding role in the nation's infrastructure development.

For 9M FY26, HUDCO reported a Net Profit After Tax (PAT) of ₹2,053.06 Crore, marking a 3.62% increase from ₹1,981.40 Crore in the corresponding period of FY25. Revenue from Operations also saw a healthy rise, reaching ₹9,587.54 Crore compared to ₹7,466.30 Crore in 9M FY25, a growth of 28.41%. The company's loan book demonstrated exceptional growth, reaching ₹1,55,631 Crore, a 30.86% increase from ₹1,18,931 Crore in 9M FY25. Loan sanctions surged by 51% to ₹1,39,151.92 Crore, and disbursements achieved a record high of ₹41,347 Crore for the nine-month period. These figures highlight HUDCO's sustained momentum and effective execution in its core financing activities.

Strategic Initiatives and Market Positioning

HUDCO's strategic initiatives are deeply intertwined with India's national development agenda. The company has launched the 'Urban Invest Window' (UiWIN), a transformative platform designed to provide end-to-end support for Urban Local Bodies (ULBs) in developing bankable infrastructure projects. This initiative aims to double urban investments over the next five years by leveraging HUDCO's extensive pan-India network of regional offices to act as State Urban Invest Windows. This proactive approach involves working closely with state governments and ULBs on project identification, financial structuring, and capital mobilization.

Furthermore, HUDCO is expanding its financing scope with the launch of a PPP Project Finance Division. This division is set to support the private sector in creating bankable infrastructure projects across key sectors such as Real Estate, Roads, Sea Port, Airport, and Energy. This move is crucial for supplementing the National Infrastructure Pipeline (NIP) 2.0, which targets a massive ₹17 trillion in investments. The company is also focusing on Urban Mobility, with plans to create a USD 1 Billion fund to finance metro and other urban transport projects, drawing from both foreign and domestic sources.

Asset Quality and Financial Prudence

Despite aggressive growth, HUDCO has maintained pristine asset quality, a significant green flag for investors. The Gross NPA stood at 1.08%, with Net NPA at a remarkably low 0.06% for 9M FY26. This is supported by a robust Provision Coverage Ratio of 94.70%, placing HUDCO among the best in the industry for asset quality. Management has been actively engaged in NPA resolution, successfully resolving several long-pending accounts and significantly reducing the overall NPA burden.

However, the company did report a net loss of ₹470 Crore in 9M FY26 due to fair value changes on FCNR borrowings, primarily impacted by currency fluctuations. Management has addressed this transparently, stating that this will be the last quarter for such an impact as they have decided to discontinue 1-year FCNR borrowings. Additionally, the debt-to-equity ratio is currently at 7.28x, which management aims to reduce to below 6 in the coming months through strategic financial instruments like perpetual debt.

Outlook and Future Growth Drivers

HUDCO's management remains confident in its growth trajectory, guiding for a 25% growth in its loan book and targeting a ₹3 lakh Crore loan book by 2030. They also expect to maintain Net Interest Margins (NIMs) around 3-3.1% on a year-to-year basis. The company's efforts in cost optimization, through a judicious mix of domestic and international borrowings, including new ¥ borrowings and multilateral funding partnerships, are expected to further enhance profitability.

The government's increased allocation to states for infrastructure development, coupled with initiatives like AMRUT 2.0 where HUDCO acts as a Credit Guarantee Fund Manager, presents substantial opportunities. HUDCO's unique position as a Public Financial Institution with a multi-sectoral focus and strong government ties makes it a key enabler for India's urban transformation and infrastructure growth. The company's consistent profitability and highest credit ratings (Domestic-AAA, International-Sovereign) further solidify its standing as a reliable financing partner for 'Viksit Bharat'.