HUDCO gross NPA falls to 0.71% after six account resolutions

HUDCO reported a gross non-performing asset, or NPA, ratio of 0.71% in H1 FY27, down from 1.04% in FY26, and said it resolved six long-pending NPA accounts in Q2 FY27 involving ₹354.56 crore, with ₹22.38 crore recovered from NPA accounts during the quarter.

How far has HUDCO's asset quality improved?

HUDCO's gross NPA ratio fell by 0.33 percentage points from 1.04% in FY26 to 0.71% in H1 FY27, extending a decline from 2.71% in FY24 and 1.67% in FY25. Its net NPA ratio was 0.044% in H1 FY27, compared with 0.053% in FY26, 0.245% in FY25 and 0.356% in FY24.

The movement means HUDCO's gross NPA ratio reduced by 2.00 percentage points from FY24 to H1 FY27, while net NPA declined by 0.312 percentage points over the same periods. The presentation identifies 99.25% of the loan book as government and its agencies, and says state government guarantees back the majority of loans alongside its appraisal, monitoring and policy-review processes.

What did HUDCO recover and resolve in Q2 FY27?

HUDCO said it resolved six long-pending NPA accounts in Q2 FY27 with an amount of ₹354.56 crore, recovered ₹22.38 crore from NPA accounts, and added no new NPA accounts during the quarter. The presentation does not specify the individual projects, settlement values or the relationship between the ₹354.56 crore amount and the ₹22.38 crore recovery figure.

The Q2 FY27 outcome follows H1 FY27 gross credit-impaired assets of ₹1,314.31 crore and net NPAs of ₹82.04 crore. The difference between these two reported amounts reflects the impact of provisions on impaired assets, although the presentation does not provide an account-by-account reconciliation. HUDCO's disclosed provision coverage ratio was 93.76% at H1 FY27, slightly below 94.90% in FY26 but above 85.44% in FY25.

How are HUDCO's remaining impaired loans being handled?

HUDCO reported that ₹745.47 crore of gross NPAs across six consortium-project accounts were fully provided for, with ₹710.49 crore across three accounts under National Company Law Tribunal, or NCLT, resolution and ₹34.98 crore across three accounts being resolved outside NCLT. The stated provision made against both consortium recovery routes was 100%.

Outside consortium projects, HUDCO reported ₹29.78 crore in two NCLT accounts and ₹396.35 crore in cases where suits have been filed or which are before Debt Recovery Tribunals, or DRTs. The presentation says these categories were also 100% provided for. The 10 largest suit-filed or DRT cases totalled ₹280.12 crore, equal to 70.68% of the ₹396.35 crore suit-filed and DRT category.

The disclosed recovery routes cover ₹1,171.60 crore when the four listed categories are added: ₹745.47 crore in consortium projects, ₹29.78 crore in non-consortium NCLT cases and ₹396.35 crore in suit-filed or DRT cases. This total is ₹142.71 crore lower than the reported gross NPA of ₹1,314.31 crore, and the presentation does not explain the difference in the recovery-route table.

What does provision coverage mean for HUDCO's reported NPAs?

HUDCO reported a 93.76% provision coverage ratio, or PCR, in H1 FY27; it defines PCR as the ratio of provisions created against NPA loans. On the reported gross NPA amount of ₹1,314.31 crore, the presentation separately reports net NPAs of ₹82.04 crore. These are reported balance-sheet measures rather than forecasts of eventual recoveries.

PCR rose from 86.87% in FY24 to 94.90% in FY26 before easing 1.14 percentage points to 93.76% in H1 FY27. The provisioning status varies little across the recovery categories shown because each listed category, including ₹710.49 crore under NCLT and ₹396.35 crore in suit-filed or DRT cases, is marked as 100% provided for.

HUDCO has set a target of zero net NPA. Its reported 0.044% net NPA ratio in H1 FY27 was 0.009 percentage points lower than the 0.053% recorded in FY26, but it was not yet zero. The target should therefore be considered alongside the remaining ₹1,314.31 crore of gross impaired assets and the disclosed resolution processes.

How does asset quality compare with HUDCO's loan-book growth?

HUDCO's loan book reached ₹1,86,111 crore in H1 FY27, compared with ₹1,44,554 crore in H1 FY26, a reported year-on-year increase of 28.75%. Over the same period, gross NPA was below 1% at 0.71% and net NPA was 0.044%. The presentation also reports H1 FY27 sanctions of ₹1,04,592 crore and disbursements of ₹35,371.54 crore.

HUDCO reported H1 FY27 net profit of ₹1,762.15 crore, up from ₹1,340.06 crore in H1 FY26, while operational revenue increased to ₹7,757.59 crore from ₹6,156.34 crore. These financial measures are separate from asset quality, but they provide the period context in which HUDCO reported a ₹1,86,111 crore loan book and a 93.76% PCR.

Conclusion

HUDCO's H1 FY27 presentation shows a continued reduction in reported impairment ratios: gross NPA fell to 0.71% from 1.04% in FY26, while net NPA moved to 0.044% from 0.053%. The Q2 FY27 resolution of six long-pending accounts involving ₹354.56 crore, alongside ₹22.38 crore of NPA recoveries, provides a specific update on recovery activity.

The next point to watch is progress toward HUDCO's stated zero-net-NPA target. Its disclosure identifies ₹710.49 crore in three consortium NCLT cases, ₹396.35 crore in suit-filed or DRT cases and ₹29.78 crore in two non-consortium NCLT cases, all marked 100% provided for; future updates can show whether these routes deliver further resolutions or recoveries.