HUDCO Q1 profit up 35% YoY to ₹851 Cr as loan income and fading FCNR drag lift margins

HUDCO reported consolidated (and identical standalone) net profit of ₹851.11 Cr for Q1 FY27, up 35% from ₹630.23 Cr a year ago, on revenue from operations of ₹3,717.17 Cr (+26.5% YoY). It was a clean quarter — the company confirms no exceptional or extraordinary items — with the print anchored to core lending: interest income rose 26.8% YoY to ₹3,709.57 Cr, tracking the roughly 25% loan-book growth management had guided to on its Feb-2026 call. Net profit margin expanded to 22.77% from 21.40%.

The profit bridge has two moving parts. On the operating line, PBT grew a more measured 24.4% YoY to ₹1,066.20 Cr: net interest income (interest income less finance costs) rose about 21% to ~₹1,149 Cr, and the ₹111 Cr net fair-value loss that dragged the year-ago quarter — the FCNR/hedging cost management said would roll off — is now nil, though that tailwind was partly offset by the non-recurrence of a year-ago ₹103 Cr impairment write-back. PAT then outpaced PBT because the effective tax rate dropped to 20.2% from 26.5% year ago, aided by the board's stance of not creating deferred-tax liability on the Special Reserve. Note that the 57% sequential drop in PAT is purely a base artifact — Q4 FY26's ₹1,981 Cr was lifted by a one-off ₹1,530 Cr deferred-tax credit; on a pre-tax basis Q1 PBT is actually up 72% QoQ.

The stock went into the print at ₹203.97, down 2.1% over the past month of trading.

For context: this is the second-highest quarterly PAT of the last 6 quarters; revenue is at a 6-quarter high.

Against its own guidance the quarter is broadly on track — loan-income momentum and the promised end of the FCNR P&L hit both materialised — but the pledge to bring the debt-to-equity ratio below 6x near-term went the other way, with D/E edging up to 6.70x from 6.61x a year ago as the book expanded (₹2,140 Cr raised via NCDs during the quarter, CRAR still comfortable at 39.41%). Asset quality improved on every metric: gross credit-impaired assets fell to 0.96% from 1.34%, net to 0.05%, provision coverage rose to 95.06%, and four project NPAs were fully resolved with no fresh slippage. The quarter also saw ₹1 lakh-crore urban-infra funding MoUs signed with Odisha, Bihar and Gujarat and a strong loan-sanction/disbursement update, feeding the pipeline behind this growth. The board declared a first interim dividend of ₹1.25/share. No firm Street consensus for the specific quarter was on record; management gives no formal EPS guidance beyond its loan-growth and NIM framework.