HUDCO shares soar 15% to hit record high; multibagger PSU stock now up 369% in 1 year

Multibagger inventory Housing & City Growth Company Ltd (HUDCO) rallied 15 per cent to hit a recent file excessive on Friday, taking its one-year features to 369 per cent. This was the sixth day of features for HUDCO shares amid optimism over its enterprise prospects after the federal government accorded Navratna standing to the PSU, with the ranking company ICRA additionally re-affirming its credit standing on the corporate.

ICRA on April 24 steered a secure outlook for HUDCO, because it feels the PSU will stay strategically essential to the federal government for the implementation of its coverage within the excessive precedence housing and concrete growth sectors. HUDCO is more likely to preserve sufficient profitability, borrowing, and capitalisation profiles, it mentioned.

On Friday, the HUDCO inventory rose 15.28 per cent to hit a excessive of Rs 234.20 on BSE.

HUDCO’s borrowing programmes derive important energy from its sovereign possession (75.17 per cent authorities stake) and its essential function as a nodal company for the implementation of presidency insurance policies within the excessive precedence sectors of social housing and concrete infrastructure.

The rankings, ICRA mentioned, additionally draw consolation from the comparatively low credit score danger profile of HUDCO’s portfolio, given the concentrate on government-sponsored city infrastructure and different initiatives backed by ensures and budgetary provisions from central/state governments for debt servicing by the involved entities.

“The rankings additionally consider HUDCO’s snug capitalisation degree, diversified borrowing profile and good monetary flexibility, given its sovereign possession, which helps its liquidity profile regardless that the comparatively much less dangerous publicity ends in modest earnings,” ICRA mentioned.

ICRA mentioned whereas the credit score danger for HUDCO’s mortgage portfolio is mitigated by the presence of presidency ensures, the weak monetary profile of lots of the state governments stays a danger.

HUDCO’ s gross and web stage 3 percentages stay beneath management and stood snug at 3.1 per cent and 0.4 per cent, respectively, as on December 31, 2023.

HUDCO witnessed modest portfolio progress in 9M FY2024. With the pick-up in sanctions and disbursements within the latter half of FY2024, ICRA expects the corporate to report good progress going ahead. ICRA additionally took cognisance of HUDCO’s incapacity to fulfill the situations for continuation as a housing finance firm (HFC) beneath the revised regulatory definition. On this regard, the corporate is within the strategy of looking for recent registration beneath the Reserve Financial institution of India (RBI).