Housing and Urban Development Corporation Limited (HUDCO.NS) fair value

ACCE thesis

HUDCO is a state-owned lender that finances urban housing, infrastructure and redevelopment projects across India, earning interest on a loan book that runs through government-backed programmes and direct project lending. Its edge is the sovereign-linked funding base and the policy mandate behind it, which keeps cost of capital low and gives it a steady pipeline of public-sector and affordable housing borrowers that private lenders rarely reach. The near-term driver is India's urban housing and infrastructure build-out, which feeds loan growth; reported revenue grew 9.8%. The stock trades on a trailing P/E of 7.1 and a forward P/E of 6.3, a discount that reflects the state ownership and the credit and policy risks of lending to government-linked projects, so the question for a deeper look is whether asset quality and loan growth hold up at that multiple.