HUDCO - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | HUDCO | Market Cap | 41,089 Cr. | Current Price | 205 ₹ | High / Low | 254 ₹ |
| Stock P/E | 10.2 | Book Value | 110 ₹ | Dividend Yield | 2.21 % | ROCE | 8.41 % |
| ROE | 20.2 % | Face Value | 10.0 ₹ | DMA 50 | 203 ₹ | DMA 200 | 207 ₹ |
| Chg in FII Hold | 0.25 % | Chg in DII Hold | -0.43 % | PAT Qtr | 1,981 Cr. | PAT Prev Qtr | 713 Cr. |
| RSI | 48.4 | MACD | 3.03 | Volume | 24,52,515 | Avg Vol 1Wk | 33,25,904 |
| Low price | 159 ₹ | High price | 254 ₹ | PEG Ratio | 0.31 | Debt to equity | 6.45 |
| 52w Index | 48.8 % | Qtr Profit Var | 172 % | EPS | 20.2 ₹ | Industry PE | 18.7 |
📊 Core Financials
- Revenue Growth: Quarterly PAT rose to ₹1,981 Cr from ₹713 Cr, showing strong 172% growth.
- Profit Margins: ROE at 20.2% indicates solid profitability, while ROCE at 8.41% is modest.
- Debt Ratios: Debt-to-equity of 6.45 reflects very high leverage.
- Cash Flows: Dividend yield of 2.21% provides decent shareholder returns.
- Return Metrics: EPS of ₹20.2 shows steady earnings power.
💹 Valuation Indicators
- P/E Ratio: 10.2 vs industry PE of 18.7, suggesting undervaluation.
- P/B Ratio: Price ₹205 vs book value ₹110, trading at ~1.9x book.
- PEG Ratio: 0.31, indicating attractive valuation relative to growth.
- Intrinsic Value: Current price near DMA 50 (₹203) and DMA 200 (₹207), showing consolidation.
🏢 Business Model & Competitive Advantage
Housing and Urban Development Corporation (HUDCO) operates in financing housing and infrastructure projects, with strong government backing. Its competitive advantage lies in policy support and focus on affordable housing. However, high leverage limits financial flexibility.
📈 Entry Zone & Long-Term Guidance
Entry zone looks attractive around ₹190–₹210 given RSI (48.4) and MACD (3.03) showing balanced momentum. Long-term holding is viable due to undervaluation and government-backed demand, though debt levels pose risks.
✅ Positive
- Strong quarterly PAT growth (172%).
- ROE of 20.2% reflects solid profitability.
- P/E ratio (10.2) below industry average (18.7), suggesting undervaluation.
⚠️ Limitation
- High debt-to-equity ratio (6.45) increases financial risk.
- ROCE of 8.41% is modest compared to peers.
📉 Company Negative News
- DII holding decreased (-0.43%), showing reduced domestic institutional support.
- High leverage remains a concern for long-term sustainability.
📈 Company Positive News
- FII holding increased (+0.25%), showing foreign investor confidence.
- Quarterly PAT surged from ₹713 Cr to ₹1,981 Cr.
🏭 Industry
The housing finance and infrastructure sector benefits from government initiatives and urban development. Industry PE at 18.7 is higher than HUDCO’s 10.2, suggesting undervaluation. However, high leverage and cyclical risks remain challenges.
🔎 Conclusion
HUDCO demonstrates strong profit growth and undervaluation relative to peers, but high debt levels limit financial flexibility. Entry around ₹190–₹210 is attractive for investors seeking exposure to housing finance. Long-term holding is recommended with caution due to leverage risks.
Would you like me to also compare HUDCO with peers like LIC Housing Finance, Can Fin Homes, and HDFC Ltd to evaluate relative positioning in the housing finance sector?