Hi. Good afternoon to all of you.

We have with us today the management team of HUDCO to discuss their Q3 results. From the management side, we have Mr.

Sanjay Kulshrestha, who is the Chairman and Managing Director; Mr. M.

Nagaraj, who is Director, Corporate Planning; Mr. Daljeet Singh Khatri, who is Director, Finance; and Mr.

Achal Gupta, who is the General Manager and General Manager, Finance. Without further ado, I'll hand the call over to CMD, sir, for his opening remarks.

We'll follow that up with question and answers. Over to you, sir.

Sanket, thank you. Let me give the background of the today's earning call.

As we proceed, whatever guidance we had already given to the market from last two years, from time to time, we are adhering to those guidances. We are continued to grow around 25% in our loan book.

At the same time, we are reducing our cost of funds and diversifying. By the time RBI has given us a mandate to become infrastructure finance company, we are extending and diversifying our asset base into the various segments.

We are adding up a lot of new borrowers in our kitty. We are working very extensively and aggressively towards the resolution of the NPA assets.

We have successfully resolved most of them. Quite a few are also their balance, and now our net NPA is just close to zero, it is around 0.06%.

Continually, we are working and making our efforts to supplement the effort of the Government of India towards the Viksit Bharat and identifying our role and responsibility, and supplementing the efforts through debt financing, as well as the creation of the value across the value chain and working very closely with the urban local bodies. Recently, you may have aware, we have launched a very big platform, you can say, in terms of Urban Invest Window, which will become a one-stop solution from creation of the projects to make it bankable, financial closure, inviting the investor, HUDCO loan, and convergence from the Government of India schemes.

Government has also announced one big program to upgrade and enhance the capacity of the project implementation for ULB, that is Urban Challenge Fund. Very shortly, we are hopeful that the policy will take its shape, which is under discussions from last nine months.

Many stakeholder discussions had already happened. Now, the ULBs are on board, and very soon the guidelines will come.

At the same time, if you have seen the budget, because if you see the last week, there are three, four important events that has done in the Indian economics, starting from the Economic Survey to the general budget and the 16th Finance Commission. If you see the latent of all these conversations and the documents, everything is focused towards the sustainable urban, the bankable urban, and the viable urban.

Because we all believe that we have to create a cities of the global standard, we have to see that how the rural economy will work, and that's why, if you have seen, the Finance Commission has put in lot of emphasis on the rural development, lot of emphasis on the urban reform, starting from the conservation of the resources like water, logistics, books, financials. Lot of emphasis has been given and, at the same time, lot of financial incentives are also been given.

This is a era of urban development because we have to create that kind of urban bodies which will look at the project as a bankable options and HUDCO as a premium institution, which is not agnostic to any sector. We are very hopeful that it will further reinforce our business, it will ensure our business, and at the same time, we will see the bankable projects are coming up at the national landscape.

Thank you so much. Now, we are ready for the question answer.

Anything, we are ready, as a management, to answer the questions.

Hi. Thanks for opportunity.

Am I audible?

Yes, of course.

Sir. Regarding this net loss on fair value changes, which is ₹470 crore in the nine months FY26, I believe this is from the FCNR borrowings, right?

What is the plan going forward? Because we have already reduced this FCNR outstanding significantly from ₹15,000 crore to ₹5,000 crore.

Are we going to completely come out of this? What will be the impact on the cost of fund in that case?

That's my first question.

Yes, you are right. It is the impact of the FCNR borrowing on which we had taken lot of incentive in around first six months or seven months, and then because of the currency fluctuations, things has gone out of the hedging limits, and this may be the last quarter.

The current quarter will be the last quarter, and now we had decided to not take the one-year FCNR.

Sir. Completely, it will be zero in the going forward, right, sir, future?

Yeah. This will be the last quarter.

Fine.

From next quarter, there will not be any impact. Yeah.

Clear, sir. One more thing regarding this ECBs, I think it is 100% hedged, right, sir, external borrowings?

Yes. There will not be any P&L impact on that.

The average cost you have mentioned is around 6%. This 6% is including the hedging cost or hedging cost is not included in the 6%, sir?

Yeah. These are long-term loans on which we had taken a hedging and we had taken the protection level as high as whatever the best is available for next five 15 years,

and

on the historic values only, we had taken the protection level, and these are hedged kind of resources.

Okay. It included the hedging cost, whatever the 6% you have given?

Yes. Oh, it includes.

Thank you, sir.

These are Japanese currency loans. That's why these are the cheaper options.

Sir. Thank you for the opportunity.

Wish you all the best. Thank you.

Thank you. Thank you.

Yeah. Hi, sir.

Wish you a very good evening to you and your entire team. Now, sir, I have a few questions.

I'll just take it step-by-step. Sir, firstly, if I recall correctly, in this budget, the government has actually authorized more money to the states, which is to the tune of ₹2 trillion.

Okay. Now, this is actually a 33% increase in the allocation to states.

Now, sir, since we basically lend to states and we focus on infrastructure, is my understanding correct that this will be very, very positive for us? That's my first question, sir.

My second question, sir, is basically that if I see your nine months, the earlier participant did touch upon the FCNR issue. Sir, if I just put the entire foreign exchange loss what we have is for the nine months, my understanding is that is it ₹350 crore, so that means our PAT is actually at about ₹2,400 crore versus ₹1,900 crore in the nine months preceding last year.

Effectively, it means that your growth in profit is actually equal to your growth in loan book. If is our understanding correct on that front, sir?

My third question, sir, is basically that if we have a spread of about 2% or ROAs are about 2%, and we are targeting a ₹3 lakh crore loan book, which is basically what you guided for in the past, which I think will happen much earlier than what you said. My sense is by FY29, you could get there.

That means, sir, is my understanding correct that our profits will be higher than the ₹6,000 crore mark in the next couple of years, which today should be about ₹3,000? Is that also understanding correct?

My last question to you, sir, is basically can you please highlight what is the total amount of MOUs which we have signed today and what is the conversion of the MOUs into basically sanctioning and then the duration from sanction to disbursement, sir? Thanks a lot, sir.

Yeah. Thank you, Sumit.

I think very pertinent questions, I think. First, you had asked regarding the FCNR.

The total loss on FCNR for nine months is ₹470 crore. If you add this value of ₹470 crore in our profits, it will be around ₹2,500 against ₹2,000-odd crore.

There is a loss which is one time, and this quarter will be the last for that. Yes, you are right.

Actually, it is not ₹360, it is ₹470. Second is we are trying to achieve this ₹3 lakh crore loan book, which we are trying by 2030, and lot of efforts we are taking.

There are lot of support from the Government of India schemes, policies, or legislations, and capital infusion. Lot of clarity had came in the urban sector that definitely there will be a push for creation of urban infrastructure.

With 2% of the spread, it's a arithmetic on 3 lakh, which will be double from 1.5 to 3 lakh. You are right, we will be something around that with 2% of the spread.

Total MOUs that we had signed around ₹7 to ₹8 lakh crore, but of late, now we had made a slight change in our policy that first we need to identify the project. After identification only, we will be going for the MOU signing because we want to see that what is the preparedness of the states.

Already, ₹7 to ₹8 lakh crore MOUs are signed, and out of which, we have a committed loan sanction pipeline of around ₹2.5 lakh crore. It is not like that everything is coming out of MOU.

There are many other projects which are not the part of the MOU, but since we are working through our regional offices and understanding the need of the utilities and the states, other than the MOU also, there are a lot of projects that we had sanctioned during the current year. If you had seen in the present year only, we have sanctioned around ₹1.4 lakh crore.

With a commitment sanctions of around ₹2.5 lakh crore, I am very sure that we will be achieving the figures of ₹3 lakh crore.

Sir, if I may ask you that this ₹2.5 lakh crore which is now sanctioned, you should disburse this by when, sir? Normally what's the timeline between sanctioning and disbursement?

Generally, if I sanction one project, it takes six to one years of the time to start the disbursement. Generally, 20% disbursement comes in the first year, and these projects are long gestation infrastructure projects, it takes three to four years of the time.

For ₹2.5 lakh crore, you can say, starting from the ₹30,000, ₹40,000 crore in the last sanctioned project, it will continue to rise from 30%, then 40%, then the balance one, then the last year will be around 20% to 25% only.

Understand. Okay.

Great, sir. Sir, just on the first point which I asked you about the state in this budget, because today only, I was just on a call with one of the global analysts, and they highlighted this statistic very clearly that the money allocated to states is about 33% higher than the preceding year.

Will that actually help stimulate our growth as well?

Yeah. You are very right.

These are the SASCI loans extended by the Government of India, and this initiative has been taken three years back, and now it stands at ₹2 lakh crore. Actually, these loans are long-term loans, 50 years loans.

Earlier also, it was around ₹1.5 lakh crore in the last financial year, which has raised to ₹2 lakh crore. Because if you see, government wants to push the reform.

These are all reform-based kind of incentives that the Government of India is extending to the state government. SASCI loan is one of that, which has lot of strings attached, but I am very happy that states are complying to those strings and they are developing that kind of sustainable infrastructure.

I will just like to extend, in this Finance Commission also, there is a grant of 56,000 for say water recycling, which will be extended to the ULBs for coming up with the water kind of projects. There is another grant for the performance or issuance of the bonds also that ₹100 crore on ₹1,000 crore of the bond issuance will be given.

All these things, which are supporting the cause of creation of the urban infrastructure, I think HUDCO will be the best beneficial institution out of all these initiatives, because without borrowing, completion of the big infrastructure project is not possible. This will become a catalytic kind of agent.

This will become a VGF kind of support. This will come as a viable to create a viable kind of projects for the states.

Got it. Sir, and just one last thing.

Sir, firstly, many congratulations to you and your team because you had guided for ₹1,50,000 crore by FY26, but you've crossed 155 already. What's your guidance now, sir?

How are you looking at guidance for end of this quarter plus for next year? If you can just share your guidance then that would be wonderful, sir.

See,

we have make a internal policy that we will divide the disbursement across the year, and the same principle we are following. For this financial year, our target is around ₹50,000 crore of disbursement.

With this, you can calculate the kind of loan book, and we are giving a result of around 25%. I think it's a simple arithmetic that you can do.

Okay. Fine.

Thank you so much, sir. Wish you all the best, sir.

Good luck, sir.

Thank you so much, Sumit. Thank you so much.

Hello. Thanks for taking my question.

My first question is that you have given a guidance of ₹50,000 crore disbursement this year, but for this year and next year, what will be your repayment trend like? My second question is on the net interest margins.

We have seen them falling to around 2.88% in nine months of FY26. Is it because the growth has been back-ended or there is some other reason?

What is our outlook ahead, and what are the factors which will drive the NIMs ahead? These two questions I am having.

Repayment is around ₹5,000 crore that we are getting.

₹17,000 to ₹18,000 crore.

Around ₹4,000 to ₹5,000 crore every quarter, you can say around 17 to ₹18,000 crore per annum. This is our repayment.

Regarding the NIMs, as you have asked, you are right that there are some disbursement which were back-loaded. On year-to-year basis, you will see that it will be around 3, 3.1% kind of NIM that we will be maintaining, and there is no internal issue on that.

Okay. With respect to bank borrowings, what part of them are EBLR-linked and MCLR-linked?

All are EBLR-linked.

All are from the banks. They are EBLR-linked.

Okay. Thanks.

Hi. Good afternoon.

I am Daljeet Singh Khatri, Director, Finance. As CMD, sir, has said, most of my bank borrowings are linked with external benchmark.

Only the bonds, they are of fixed nature. Entire banking is of variable nature, linked to repo rate or the T-bill.

Okay. On your asset side, what part of the assets are fixed, and how many are on one-year reset and three-year reset?

I think around 60% of my book is one-year linked and 30 to 40% 30% is three-year linked, and rest is fixed also. Around 5 to 7% is fixed rate.

Okay. My last question is on the NPA resolution.

For the remaining lot of projects which we are having which are under consortium and outside consortium, how does the resolution trajectory look like ahead?

As CMD, sir, has said in the beginning that our total focus is on resolution of NPA assets, and we have resolved around ₹500 crores in the previous financial year. In this current financial year also, NPAs aggregating to around ₹385 crores, we have already resolved.

Now we are left with only ₹1,600 crores of NPAs, gross NPAs, out of which around ₹800 crores is under liquidation through NCLT. We will be left with around another ₹7 to ₹800 crores, and we are hopeful that we will be able to resolve most of them by the end of next financial year.

Sir. That's it from my side.

Thanks a lot.

Hello, sir. Congratulations.

I wanted to ask you that as we are pivoting towards financing infrastructure beyond housing, you are entering a space crowded by aggressive commercial banks and other NBFCs, right? What is the yield differential in these new infrastructural loans?

I think we have our own space of working, and that's why our loan book is continually increasing even though the competition is there. I think the competition is good for the country, and I think every institution, if you are talking about the competition from the banks, we are working in some of the project along with the banks also.

There are some forte where only HUDCO can fund, and because of our reach and penetration across the state and the understanding of their policies, supporting the Government of India projects in terms of say counterpart requirement under AMRUT or Swachh Bharat. Generally, these kind of products didn't work well with the bankers.

We have our niche kind of project identified for HUDCO. Banks have their own.

Apart from that, we are working with the banks, and now we had came out with the financing of the private sector also, the PPP models, and we had identified five sectors where we generally will work with the bankers and other financial institution like real estate, road, port, airport, and the energy transition. Other than that, for metro project, we are converging with other financial institution working in the same space of metro.

It is not like that there is only the competition, it is the collaboration also, it is the specific area also where the HUDCO works.

Thank you so much. One last question.

What is the total value of loans under moratorium or restructured status that have not been classified as Stage 3 NPAs yet?

No, there is no asset.

In the last 8 to 12 quarters, we have no addition of Stage 3 assets in our book.

In future are we planning to add any?

No, no, never. We will never plan to add Stage 3 assets.

I don't think because of the strict monitoring being adopted by the company. Starting from the cash flows to security to the progress of the project, cost, quality.

Extensive monitoring is being done. If you see the SMA-2 is also continuously reducing and, as we speak, all the SMA-2 has been resolved.

Thank you so much, sir, and have a great year ahead. Thank you.

Thank you so much.

Sir, there's just only one thing. Effectively, this fourth quarter will be the last quarter where we'll have some amount of forex impact or whatever.

Is my understanding correct that from April onwards, we will have no foreign currency impact at all?

Yes, that's true. This will be the last quarter.

Okay. Fine.

I just wanted to get that clarity. Okay.

Thanks a lot,

sir.

Thanks.

Thank you.

Hi, sir. Thank you for the opportunity.

Sir, just wanted to understand, how is the ground-level trends in terms of infrastructure pickup, and how are the state spends in terms of building the roads, metros, airports, where HUDCO is seeing an enormous opportunity to grow?

Right. Our Director Mr.

Nagaraj will be answering this.

Yeah. Good afternoon.

Very rightly you asked that. Let me give a small example of HUDCO's portfolio.

To begin with the metro, we're already planning to have a two metro. Already, we are given a sanction under like Indore, Bhopal.

In addition to that, we are working with many number of metros in consultation with other like-minded parties. Then let me come to airport.

In the state of Andhra Pradesh, in tier-2, tier-3 cities, they are coming out within a big-way in airports. We have funded four airports, and also one international-level airport at Kangra, we are funding it.

This is in airport sector. When it comes to construction of water supply and sewage, like Godavari water supply scheme in Andhra Pradesh, and also Jal Jeevan Mission in two states, we funded in a water supply.

One more very unique area, desalination of water in the state of Tamil Nadu nearby the coastal cities, we are doing it. Plus, in the city of Chennai, transit-oriented development across four metro stations, which is a very unique project we have funded.

Plus also like a tourism, we're into different sectors in different places. I didn't touch upon land acquisition for transport sector.

Number of projects we are funding it in a transport sector. Some of the highways I would like to give an example, from Nagpur to the Goa, this is called Shaktipeeth Expressway, and many such projects we are in the funding, already funded, plus also in the pipeline.

This is a small gist of a project which I have just narrated. There are huge scope of funding infra.

Yeah. Just to give you a general perspective.

Yeah.

Hello, sir. Please continue.

Am I audible?

Yes, sir, audible. Just to

give you a general perspective, as Nagaraj साहब has given you the specific project. If you see the ecosystem in the countries, like every state wants to develop, they don't want to miss the opportunity.

All states have a very diversified resources available with them. If AP has some geographical resource available with them from the coastline to say solar radiations to truncation of the national highways, then, if you see, the UP has land monetization, lot of new towns being developed.

Every state is working to monetize their assets, coming up with big infrastructure projects. If you see, all the states are coming with the theme of some investment plan, state investment plan, or Swarnim Andhra Pradesh, or Viksit Rajasthan.

Every state is coming with a roadmap of development, and that's why we are talking about the Viksit Bharat. Lot of FDI is coming continually, Government of India is working on that.

Lot of interest is coming. Now the aspirations of the public that they need as a right that there should be good road, there is good sewerage, there is good water, tapped water, there is good energy, that is clean green energy.

All these kinds of aspirations are putting pressure on the system that they need these kinds of infrastructure. Our models, starting from the BOT, EPC, HAM, all these things are so matured that now we are trying HAM model even in the housing sector.

I think it is an era of development, and another 20, 22 years by 2047, lot of infusion will come, lot of new infrastructure will come, and the way we are growing, the economy will grow on that part.

Got it, sir. Thank you so much.

Sir, one more thing I just wanted to understand. Just sorry to double touch on this.

You mentioned that translation losses would likely get over by Q4, more so because of your one-year FCNR borrowings being completely running out. Sir, all the ECB borrowings which we still have, which you said you are hedged for 15 years or so, those are complete hedging, and how confident is it that from next year, we wouldn't have any specific translation losses or minuscule translation losses from here?

Just some details here would be really helpful.

Sure. Our Director, Finance will answer this.

Sumit. These ECBs aggregating to around ₹10,000 crores, they are having a maturity of roughly five to original maturity of 5, 5.5 years, and they will be due for redemption after 3, 3.5 years.

Coming to your question on hedging, we have hedged the entire ECB borrowings through the option structures with extended protection under the EKI options. Like European knock-in, knock-out options are there, which provide additional safeguard over and above the forwards which are shown in the Bloomberg based on the date of maturities.

In the near term, we see this kind of volatility which we have seen in the last one year or so, but considering the period of five years or 10 years, there has been only an average depreciation of 3, 3.5%. We are confident that these protection levels are sufficient to protect us from any kind of volatility over a period of three to four years.

That's really helpful, sir. Thank you.

That's it from my side.

Yeah. Hi, sir.

Thanks for the opportunity. Firstly, sir, if I look at our debt-to-equity, currently, it's at a range of 6 to 6.5.

Looking at the growth, at what levels are we comfortable with debt-to-equity?

Presently, my debt-equity ratio as at the end of December 31st, 2025 is 7.28 times, right? We are and we understand we are continuously monitoring it that this is going up, but as such being NBFC, there is no upper cap on my debt-equity ratio, except that in case of external commercial borrowings, there is a cap of 10:1.

We are already on the job, and we are shortly will be coming out with the instruments to improve our debt-equity ratio. Primarily, we are going to focus on coming out with the perpetual debt instruments which qualify as Tier 1 capital, and then we'll think about other options which are available to us.

We plan to bring it back to less than 6% in the next two, three months.

Just to add, since there is a growing demand in the market and we also want to grow, definitely, you are right, there is a pressure on debt-equity, but there are measures to attend. There are slightly costly measures, so that's why we have not yet decided.

We will decide regarding that measure, and the call will be taken at the right time. We are aware that it is around +7%, and we have to be remain at around 7%.

If you see, you have to see on the yearly basis. Please wait till our results are out for the 25, 26, and you will see that the figures are slightly improved.

At the same time, we will take a call on improvement, as Director, Finance has said, to revisit this through the perpetual loans or something like that.

Perfect, sir. Got it.

Secondly, sir, if I look at your overall loan book, your PMAY, any updates on PMAY 2.0 and how are we focused on growing this housing pie and any talks or MOUs with the states on this front?

PMAY 2.0 little slow it has started off. I think gradually, we are picking up.

Most of the states have started doing an assessment. This time what their planning is that very structured way they are going it.

They're making an assessment, then coming out a scheme by scheme. Majority of the states in the northern sector has already started in a way.

Maybe I think next financial, it will pick up in a big way.

Got it. Lastly, sir, in your sense, what could be your potential competitor in this space?

Because the kind of growth and the kind of contracts that we are witnessing coming from states, is there a thing that government could come up, or there would be another organization there would be a duopoly or players coming up in this space?

See, there are already organization and institutions, starting from the banks to NaBFID, NABARD, to some extent, REC and PFC. I think institutions are already there working with the urban infrastructure segment, but if you see, the demand is too much.

We need the multilateral loans, we need the investors, we need the FDI. If you see, as per the High Level Committee Report, the urban investment to the tune of around ₹80 lakh crore is required between '21 to '36.

It amounts to around ₹7 to ₹7 to ₹8 lakh crore on annual basis. Presently, we are doing only ₹2, ₹2.5 crore yearly.

There is a long jump that we need to do, and all these institutions are gear up to support this, and that's why this Urban Challenge Fund or lot of new activities like issuance of the bonds to attract the investors, all these activities has been started by the Government of India.

Got it, sir. Just a follow-up on this.

What would be our right to win, considering the competition, like you said there is PFC, REC also coming up with a merger soon? Just to understand our right to win in this space in urban infra development space.

REC, PFC are a big organization, and they are primarily working towards the power and energy. If you see, the requirement in power, energy, distribution, transmission, renewable, energy transition, hydrogen, it is enormously high, enormously high, and these institutions are catering to that kind of demands.

At the same time, they are supplementing our efforts in some way. Maybe 10%, 15%, or 30%, whatever they can take, they are taking, but they are not taking 100%.

The requirement is of 100%. That's why I will start from my last answer only.

That's where the NaBFID is required, NaBFID is created, NABARD is required, HUDCO is required, IIFCL is required. I think all these institutions have their own roles and responsibilities.

Since we are a institution of strategic importance working under MoHUA, who is actually taking care of the urban infrastructure, knowingly the policies of the Government of India from say Urban Challenge Fund, or metro, or water, or waste, or sewerage, all these things are the domain of HUDCO. Their domain is energy, our domain is urban infrastructure.

Perfect, sir. Got it.

Thank you so much. All the best for upcoming quarter.

Thank you. Thanks.

Thank you so much. It was very good answering the questions from the fraternity, and we had taken note of the concerns, and we had answered.

I'm sure that you will be satisfied with the answers, and if there is any follow-up information required, and then Mr. Achal Gupta and his team will be there to support you.

We are open for all the market information from time to time, and I hope we will be meeting very soon. At the same time, whatever guidance we gave to the market, we adhere to that guidance.

We don't want that we will be overachieving or underachieving. Whatever we have planned, we come out to the market in a very transparent and very clear terms, whether it is forex losses, whether it is cost of funds, whether it is loan book, whether it is different kind of infrastructure that we are being doing, or whatever works we are doing.

I think, on week-to-week basis, we have a very close kind of interactions through the media, through electronic media, or through interviews. Please stay connected with HUDCO, and I can assure you that the growth path that we are continuing, it will be continued for the years.

Thank you so much for having interest in the HUDCO. Thank you so much.