HUDCO's Stock Upgraded to 'Hold' as Company Shows Positive Results and Strong Market Performance

Housing & Urban Development Corporation (HUDCO) has recently caught the attention of investors as its stock call has been upgraded to 'Hold' by MarketsMOJO. This largecap company in the finance-housing industry has been showing positive results for the past three quarters, with its net sales reaching a high of Rs 2,188.35 crore and PBDIT at Rs 2,141.51 crore. Its PAT has also grown by 25.2%.
Technically, the stock is in a mildly bullish range and has shown improvement from a sideways trend on October 28, 2024. The MACD and KST technical factors are also bullish, indicating a positive outlook for the stock.

HUDCO has outperformed the market with a return of 166.80% in the last year, compared to the BSE 500 returns of 34.46%. With a market cap of Rs 38,837 crore, it is the largest company in the sector and holds 22.89% of the entire sector's market share. Its annual sales of Rs 8,131.03 crore make up 12.81% of the industry.

However, the company has shown poor long-term growth with net sales and operating profit growing at a rate of 6.93% and 8.71%, respectively. Its ROE of 12.7 indicates a very expensive valuation with a price to book value of 2.5. The stock is currently trading at a premium compared to its historical valuations. Although it has generated a high return in the past year, its profits have only increased by 28.4%, resulting in a PEG ratio of 0.6.

Institutional investors have also decreased their stake in HUDCO by -2.97% in the previous quarter, holding only 11.37% of the company. This could be due to their better capability and resources to analyze the fundamentals of companies compared to retail investors. Overall, while HUDCO has shown positive results in the short term, its long-term growth and expensive valuation may be a cause for concern for investors.