HUDCO Shares Hit Lower Circuit Amid Focus On Affordable Housing In Budget 2025; Buy Or Sell?

HUDCO Shares Hit Lower Circuit Amid Focus On Affordable Housing In Budget 2025; Buy Or Sell?

Shares of HUDCO (The Housing and Urban Development Corporation) experienced a sharp decline in trading on February 3, 2025, with its stock price dropping 10% to hit the lower circuit. Established in 1970, the public sector enterprise saw the stock dip to an intraday low of Rs. 191.21 this morning.

HUDCO Share Movements Today

On February 3rd, HUDCO shares experienced a significant decline of around 10%. The stock opened at Rs.214, which also marked the day’s intraday high, but by 12:30 PM, it was trading at Rs.199.15. So far this month, the stock has dropped by approximately 19%, and over the past six months, it has seen a 31% decline.

HUDCO Share Price Target

Mirae Asset has set a 40% upside potential for HUDCO shares, indicating significant growth in the stock’s value.The company, in its report, said, “We expect a strong AUM CAGR of ~29% over FY24-27E. RoE is expected to improve by ~410 bps to 17.3% over FY24-27E. We stay positive and expect a potential upside of 40%. It is a proxy play on India’s infrastructure and housing growth story. There is a strong visibility of growth over the next three years, as it is the biggest beneficiary of government thrust on affordable housing and urban infrastructure financing needs. Currently ~75% of HUDCO’s exposure is state government-guaranteed; thus, risk is low, providing a steady path for the RoA trajectory, and lately it has started underwriting cash flow-generating projects. Stock trades at 2.3x/2.0x/1.6x its FY2025E/FY2026E/FY2027E BV estimates.

HUDCO Q3FY25 Financial Results

HUDCO delivered impressive results for Q3FY25, reporting a 42% year-on-year growth in net profit, which reached Rs. 735 crore, compared to Rs. 519 crore in the same quarter of the previous year. Net Interest Income (NII) stood at Rs. 983 crore, with a 47.3% YoY growth and a 23.3% QoQ increase, fueled by strong growth in Assets Under Management (AUM).

Miarae asset In ITS report stated that, “In terms of asset quality, Hudco made significant improvements, with the Gross Non-Performing Asset (GNPA) ratio decreasing to 1.88%, a 126 bps y-o-y and 16 bps q-o-q improvement, attributed to robust recoveries.

For the 9 months of FY25, the company’s total disbursements reached ₹31,760 crore, driven mainly by urban infrastructure financing. Loan sanctions saw an impressive 5.0x growth compared to last year, rising to ₹92,151 crore in 9MFY25 from ₹18,052 crore in 9MFY24.

These strong results were further reflected in a sharp 358 bps y-o-y and 28 bps q-o-q rise in Return on Equity (RoE), which now stands at 14.71%, supported by growth in PPOP and negative credit costs.”

Housing Sector in Focus in Union Budget 2025

In her Union Budget 2025 speech, Finance Minister Nirmala Sitharaman highlighted the government’s commitment to addressing the housing needs of Indian families. As part of the Special Window for Affordable and Mid-Income Housing (SWAMIH) scheme, she announced that 40,000 housing units would be completed in 2025-26, targeting families who have faced the financial burden of paying both home loans and rent for apartments that have yet to be delivered.

Additionally, the Budget 2025 proposed an increased allocation of ₹15,000 crore to the newly introduced SWAMIH Fund 2, aiming to support the completion of 1 lakh more housing units, offering much-needed relief to homebuyers stuck in delayed real estate projects.

The budget also proposed a significant increase in the threshold for TDS on rent, raising the limit from ₹2.4 lakh to ₹6 lakh annually. This change is expected to benefit small taxpayers and landlords, reducing compliance burdens and providing a boost to the real estate sector.

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Original news source Credit: www.goodreturns.in

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