Housing and Urban Development Corporation (HUDCO) plans to achieve zero gross non-performing assets by the end of this fiscal year. The state-run lender reported a 35% jump in quarterly profit to ₹851 crore, supported by a 91% surge in loan sanctions during the June quarter.
Housing and Urban Development Corporation Ltd (HUDCO) has announced an aggressive strategy to reach a zero non-performing asset (NPA) status by the close of the current fiscal year. This target is part of a broader plan to expand its total loan book to ₹2 trillion, reflecting a significant push in its lending operations for housing and urban infrastructure.
Asset Quality and Resolution Progress
Management has indicated that the few remaining stressed assets are currently moving through resolution processes under the Insolvency and Bankruptcy Code. As of the June quarter, HUDCO’s gross NPA ratio declined to 0.96%, down from 1.34% in the previous year. The company’s net NPA ratio also showed improvement, settling at 0.048%. To safeguard against potential losses, the firm has maintained a high provisioning coverage ratio of 95%, which means the vast majority of its bad loans are already backed by financial buffers.
Growth in Lending and Profits
The company’s financial health appears to be strengthening alongside its portfolio expansion. In the first quarter of fiscal year 2027, HUDCO recorded a net profit of ₹851.11 crore, marking a 35.05% increase compared to the same period last year. Revenue from operations also saw a healthy rise of 26.55%, reaching ₹3,717.17 crore. A notable driver of this performance was a 91% year-on-year surge in loan sanctions, which climbed to ₹65,485 crore. As of the latest reporting, the total loan book stands at ₹1.73 trillion.
Diversification Strategy
To fuel sustainable growth, HUDCO is diversifying its business beyond traditional housing finance. The company is increasing its exposure to urban infrastructure, renewable energy, and industrial rental housing. Notable segments include a substantial affordable housing portfolio of ₹42,445 crore and a growing sustainability portfolio worth over ₹20,780 crore, which encompasses water supply projects and green power. Collaborations with state governments in Maharashtra and Odisha for industrial rental housing reflect this shift toward newer, high-potential urban development sectors.
As of midday trading today, HUDCO shares were trading at ₹197.75, reflecting a gain of 1.67%. For investors, the key monitorables moving forward will include the pace of resolution for the remaining legacy stressed assets and how effectively the company maintains its profit margins while scaling its infrastructure and green energy lending portfolios. The success of its collaboration with state governments for rental housing will also be a factor to watch in the coming quarters.