HUDCO - Inexpensive Valuation, Offers Attractive Dividend Yield: HDFC Securities

HDFC Securities Retail Research

Housing and Urban Development Corporation Ltd. derives significant strength from majority Government ownership (81.8% stake) and AAA rating which provides comfort to the lenders and aids in reducing the cost of borrowing for the company.

It plays an important role as a nodal agency for the implementation of Government policies in the high-priority sectors of social housing and urban infrastructure. Its portfolio is relatively low risk profile given the focus on Government-sponsored urban infrastructure and social housing projects.

HUDCO, since inception, over last five decades, has sanctioned a total of 17,326 housing and urban infrastructure projects (as of FY22), with a cumulative loan component of Rs 224,607 crore and has made a total disbursement of Rs 188,404 crore.

Apart from this, it has sanctioned more than 1.93 crore houses in the country across both rural and urban India.

In longer term, we expect, demand for housing is likely to increase with the increasing urbanisation, better affordability and higher incentives provided by the Govt. This is likely to be beneficial for companies like HUDCO.

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