Management Participants

The call was hosted by DAM Capital and featured the following HUDCO management representatives:

  • Mr. Sanjay Kulshrestha, Chairman & Managing Director
  • Mr. M. Nagaraj, Director, Corporate Planning
  • Mr. Daljeet Singh Khatri, Director, Finance
  • Mr. Achal Gupta, Executive Director, Finance & IRO

Key Financial Figures & Guidance

  • Disbursement Target for FY27: INR 65,000 crores (compared to approx. INR 50,000 crores achieved in the previous year).
  • Long-Term Loan Book Target: INR 3 lakh crores by 2029-30.
  • Net Interest Spread Guidance: Maintained at 2%.
  • Net Interest Margin (NIM) Guidance: Maintained at 3%.
  • Q1 Yield on Loans: 8.78%.
  • Tax Rate for Q1: 20.61%, lower due to a Board decision to stop creating a deferred tax liability (DTL) on special reserves.
  • Total Expected Repayments for FY27: approx. INR 20,000 crores (INR 4,000+ crores already received in Q1).

Strategic Updates & Business Environment

Management highlighted a significant shift in government policy from grant-based schemes to bankable projects in urban infrastructure. They emphasized the potential of the Urban Challenge Fund, which envisions INR 1 lakh crore from the government, INR 1 lakh crore from states, and INR 2 lakh crores from institutional finance for urban projects. Two schemes worth over INR 30,000 crores have already been sanctioned by the Apex Committee.

Major Contracts & MOUs

  • Gujarat MOU: Valued in excess of INR 1 lakh crore for projects related to metro systems, RRTS, roads, and infrastructure for international events (Police Games 2029, Commonwealth Games 2030, Olympic bid for 2036). Sanctions from this MOU are expected to begin in the current quarter (Q2 FY27).
  • Bihar MOU: Valued in excess of INR 1 lakh crore for the creation of 12 satellite towns, alongside potential road, tourism, and metro projects. An immediate outcome is a road project worth INR 21,000 crores.
  • Total Sanction Book: Outstanding sanctions stand at approx. INR 2.5 lakh crores.

Borrowing & Funding Strategy

  • Borrowing Mix: Currently ~70% domestic (bonds + bank loans) and ~10% ECB. This may shift, with ECB potentially rising to 20% of the portfolio.
  • RBI Forex Window Utilization: The company has a tie-up for USD 2 billion under this facility and has already borrowed USD 700 million (approx. INR 5,800 crores).
  • ECB Borrowing Cost: Including hedging (1.5% borne by the company), the all-in cost is between 5.5% - 6.5%.
  • FCNR Exposure: A small portion of $200 million is maturing in 2028, which is adequately secured with no expected forex losses. No short-term foreign currency borrowings are maturing in FY27 or FY28.

Asset Quality & NPA Status

  • Gross NPA: INR 1,600 crores.
  • Net NPA: INR 82 crores.
  • Breakdown of Gross NPA:
  • INR 1,100 crores from pre-2013 projects are at advanced stages of resolution under NCLT, with resolution expected within FY27.
  • INR 34 crores from 3 accounts are outside NCLT and expected to be resolved soon.
  • INR 29 crores is a non-consortium project in NCLT, also in an advanced stage.

The company expressed confidence in resolving most NPAs within the current financial year.

Private Sector Lending (PPP)

The company has sanctioned 2 private sector projects in Q1 worth approx. INR 6,000-7,000 crores. Disbursements are expected to begin later in FY27. There is no specific target for private sector lending; it will be pursued on a case-by-case basis with a focus on strong entities and projects, especially those under the Urban Challenge Fund.

Sectoral Focus

Sanctions in Q1 were concentrated on Ring Roads, expressways, irrigation, water grids, industrial corridors, and power distribution. Sustainable finance, particularly in water and sanitation, remains a priority due to its alignment with government programs like AMRUT.