Are Housing & Urban Development Corporation Ltd. latest results good or bad?

The latest financial results for Housing & Urban Development Corporation Ltd. (HUDCO) present a mixed picture, highlighting both growth and challenges. In Q3 FY26, HUDCO reported a net profit of ₹709.83 crores, reflecting a sequential growth of 12.63%. Interest income also showed a robust increase, reaching ₹3,219.03 crores, which is a 27.85% rise year-on-year, indicating strong loan book expansion. However, the profit after tax (PAT) margin has contracted to 22.05%, down from 27.35% in the previous year, suggesting pressures from rising funding costs in a tight liquidity environment.
The company’s operating profit margin, excluding other income, has also seen a decline, dropping to 95.45% from 96.29% in the previous quarter. This indicates that while revenue is growing, the cost structure is becoming more challenging. The return on equity (ROE) for FY25 stands at 15.54%, showing improvement from previous years, but it remains moderate compared to sector leaders.

HUDCO's financial performance for the quarter ended December 2025 shows a year-on-year net sales growth of 24.31%, which is a decrease from the previous year's growth rate of 37.14%. Additionally, the consolidated net profit for the same quarter has declined by 3.00%, contrasting with a 41.56% increase in the prior year. The operating profit margin, excluding other income, has also decreased to 90.68%, down from 97.34% in December 2024.

Overall, while HUDCO has demonstrated strong revenue growth and a notable increase in interest income, the decline in profit margins and net profit growth raises concerns about the sustainability of this performance amidst rising costs and competitive pressures. The company has experienced an adjustment in its evaluation, reflecting these operational challenges.