HUDCO - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.1

🧾 Core Financial Analysis

📈 Profitability & Growth

PAT Qtr: ₹728 Cr vs ₹735 Cr — stable performance with 3.94% QoQ growth.

EPS: ₹13.5 — strong earnings relative to price.

ROE (15.7%) & ROCE (9.62%) — solid return metrics, especially ROE, indicating efficient equity usage.

💰 Cash Flow & Debt

Debt-to-Equity: 5.97 — very high, typical for NBFCs but requires monitoring.

Dividend Yield: 1.92% — decent income generation for long-term holders.

Cash Flow: Likely robust due to consistent profits and government-backed lending model.

📊 Valuation Metrics

Metric Value Insight

P/E Ratio 16.0 Undervalued vs industry PE of 24.6

P/B Ratio ~2.4 Reasonable given strong ROE

PEG Ratio 0.97 Fairly priced for growth — attractive

Intrinsic Value Estimated ~₹240–₹260 Based on earnings and sector multiples

🏢 Business Model & Competitive Advantage

Sector: Housing finance — HUDCO (Housing and Urban Development Corporation) is a government-owned NBFC.

Model: Lending to housing and infrastructure projects, especially in semi-urban and rural India.

Moat: Government backing, access to low-cost capital, and strategic importance in urban development.

Growth Drivers: Smart cities, affordable housing schemes, and infrastructure push.

Risks: High debt, interest rate sensitivity, and political influence on lending decisions.

📉 Technical & Sentiment Indicators

RSI: 34.0 — nearing oversold territory.

MACD: -3.69 — bearish momentum.

DMA 50 & 200: Price below both — short-term weakness.

Volume: Slightly below average — mild selling pressure.

💡 Investment Guidance

📌 Entry Zone (If Undervalued)

₹200–₹210 — attractive zone near support and below intrinsic value.

Accumulate gradually if price dips further, especially near ₹190–₹195.

📈 Long-Term Holding View

Strong candidate for long-term holding.

Stable earnings, low valuation, and strategic importance make it a defensive play.

Ideal for investors seeking exposure to infrastructure and housing finance with moderate risk.

Monitor debt levels and government policy changes, but overall health is solid.

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