HUDCO - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.6
| Stock Code | HUDCO | Market Cap | 39,492 Cr. | Current Price | 197 ₹ | High / Low | 254 ₹ |
| Stock P/E | 14.2 | Book Value | 90.1 ₹ | Dividend Yield | 2.11 % | ROCE | 9.62 % |
| ROE | 15.7 % | Face Value | 10.0 ₹ | DMA 50 | 213 ₹ | DMA 200 | 220 ₹ |
| Chg in FII Hold | 0.03 % | Chg in DII Hold | 0.54 % | PAT Qtr | 713 Cr. | PAT Prev Qtr | 710 Cr. |
| RSI | 41.3 | MACD | -7.26 | Volume | 60,37,707 | Avg Vol 1Wk | 83,24,002 |
| Low price | 159 ₹ | High price | 254 ₹ | PEG Ratio | 0.86 | Debt to equity | 7.03 |
| 52w Index | 40.4 % | Qtr Profit Var | -3.00 % | EPS | 13.9 ₹ | Industry PE | 19.7 |
📊 Analysis: HUDCO shows moderate fundamentals with ROE (15.7%) and ROCE (9.62%), supported by a reasonable P/E of 14.2 compared to industry average of 19.7. PEG ratio (0.86) suggests growth is fairly priced. Dividend yield (2.11%) provides decent income support. However, debt-to-equity (7.03) is very high, raising financial risk. Current price (₹197) is below both 50 DMA (₹213) and 200 DMA (₹220), reflecting weak momentum. RSI (41.3) indicates mildly oversold conditions, while MACD (-7.26) shows bearish sentiment. The ideal entry zone lies between ₹180–₹190 for long-term investors. If already holding, maintain positions for 2–3 years, leveraging dividend yield, but consider partial profit booking near ₹240–₹250 resistance levels.
✅ Positive
- Reasonable P/E (14.2) compared to industry average (19.7).
- Dividend yield (2.11%) supports long-term holding.
- Quarterly PAT stable (₹713 Cr vs ₹710 Cr).
- DII holdings increased (+0.54%), showing domestic institutional support.
⚠️ Limitation
- High debt-to-equity ratio (7.03) increases financial risk.
- ROCE (9.62%) is modest compared to sector leaders.
- Stock trading below DMA levels, showing weak momentum.
📉 Company Negative News
- Quarterly profit variation (-3.00%) indicates margin pressure.
- MACD (-7.26) signals weak near-term momentum.
📈 Company Positive News
- EPS at ₹13.9 provides a stable earnings base.
- FII holdings increased slightly (+0.03%), showing foreign confidence.
- Dividend yield adds shareholder value.
🏭 Industry
- Housing and infrastructure finance sector benefits from government initiatives.
- Industry PE (19.7) is higher than HUDCO, making the stock relatively undervalued.
🔎 Conclusion
HUDCO is a dividend-yielding PSU with moderate profitability and reasonable valuations, but high leverage limits long-term attractiveness. Ideal entry is around ₹180–₹190. Existing holders should maintain positions for 2–3 years, leveraging dividends, while booking profits near ₹240–₹250 resistance levels.
Would you like me to extend this with a peer benchmarking overlay (LIC Housing Finance, Can Fin Homes, PNB Housing Finance) so you can compare HUDCO’s valuation and profitability against its closest housing finance peers?