Housing & Urban Development Corporation Ltd (NSE: HUDCO) Q1 2026 Earnings Call dated Aug. 12, 2025
Corporate Participants:
Unidentified Speaker
Sanjay Kulasek — Chairman
Analysts:
Unidentified Participant
Sanket Chera — Analyst
Shweta Dartard — Analyst
Sumit Rohrat — Analyst
Arman — Analyst
Lino Gaurav. Coaches — Analyst
Doshi — Analyst
Raghu — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Housing and Urban Development Corporation Q1FY26 earnings conference call hosted by TAM Capital Advisors. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sanket Chera from Dam Capital Advisors. Thank you. And over to you sir.
Sanket Chera — Analyst
Yeah. Hi. Very good evening to all of you. We are here to discuss food for Q1 results. We from the management side we have. With us Mr. Sanjay Kulashetra who is. The Chairman and MD Mr. M. Nagaraja. Who is a Director, Corporate Planning. Mr. Dargish Singh who is the Director of Finance. Mr. LBS Sudakal Babu who is Executive. Director of Finance and Mr. Achal Gupta who is the General manager. Without further ado, I’ll hand the call over to Mr. Sanjay Kulasek sir for his opening remarks.
Sanjay Kulasek — Chairman
We’ll follow that up with Q and A. Over to you sir. Thank you Sankir. Very good evening everyone and thank you for connecting the call. So I will start from the story of the Hutco and we are continually outperforming the expectations of our investors and the stakeholders. The company is in very healthy kind of journey. And we are continuing our journey towards the financing of the infrastructure across the country. During this journey we have started exploring new areas, new segments, new infrastructure segments. We had also explored new states and other entities for which we can land.
We had customized our product. We had came out with new policies also we had corrected ourselves. We had revised, reformed and start performing. And this is a transformational time for the country. In terms of the infrastructure. We had aligned our objective in line with the Vixit Bharat theme of Government of India. Since we are under the administrative control of MAWA which takes care of housing and urban affairs. So we had expanded our products starting from the metros to rapid rail in the mobility side. Besides the road transport corporations, the mobility e mobility. So all these things we had started at the same time.
We are also working in the water side. Lot of water projects. Lot of rejuvenation projects of the water that we are funding. Lot of demand is coming from the counterpart requirement of the states to make the Amritu successful. We are also advising them as a consultant so that we should understand their project and see the impact of these kind of work across the country. We are into the roads also starting from the state ham models to state owned EPC projects also. So lot of capital intensive requirement is coming across the country and you can see in our sanctions that is the commitment for financing of the infrastructure projects which is coming and on year, on year basis we are working as high as more than 30, 35% across the sanctions.
If you see financial at 23 we had ended with around 25,000 crores of the sanctions and financial 24 we had closed at around 83,000 crores. Last financial year we had closed at 127 lakh, 1.27 lakh crores of infrastructure funding which is on year to year basis, more than 55 60% of the CAGR on quarter to quarter basis. Also if you see from the last quarter our sanctions has raised from 14,000 crores to 34,000 crores which is a jump of around 143% on year to year basis. If you see the loan disbursements also we had in 2023 it was 8,400 and in FY24 it was 17,000 or 18,000 odd crores and FY25 we had ended at around 40,000 crores.
So clearly we are doubling our impact, doubling our disbursement which is actually improving our bottom line on year to year basis. If you see the loan outstanding, the loan assets which are actually creating revenues for us, they had increased in FY23 it was 80,000 and FY24 it was 92,000 and FY25 it has raised to 1.24 lakh crore and we had ended our quarter one at 1.34. So you can see a very clear roadmap, very clear loan outstanding which is increasing. The sanctions are increasing, the disbursements are increasing, the network are increasing. And I’m sure that you will be happy that we are continuously growing at the rate of around 30% or so during last two financial years.
So this year sanctions also around 34,000. We had already sanctioned in quarter one and we are targeting more than what we had done in last financial year which was around 1.24 lakh crore. Similarly the disbursement we had achieved around 12,800 crores. Which is all time high for the company. We are targeting around 30% of the growth. If you see from the last financial year of 40,000 crores. Similarly on the loan book side also we had grown by 30%. Now we are at 1.34%. All these things are happening. One because of the opportunity which is available in the market.
Also if you see our loan book it is not so. The volumes are not so high and there are ample opportunities to fund big projects, big capital projects. There are exposures available. The financial ratios are very, very strong. If you see our debt equity ratio it is only 5.93x so which is a very very healthy kind of debt equity ratio and which actually gives us the driving force to to make more disbursement, to make more borrowings. From last 10 quarters there is no new NPA and I am very happy to inform that we are going towards, we are reaching towards a zero NPA company.
And now our net NPAs has reduced to slightly less than 0.1% which I think is the best in the market. Liquidity buffers are very strong. We had lot of sanctions from the bank and we have a very strategized course of action for borrowing be it the bank loans, repo link loans, bonds or international commercial borrowing or fcnr. So all these things are very judiciously decided. And as a result we had been able to reduce our interest rate in last quarter we had borrowed around 20,000 crores at around 6.35 6.32% which is a remarkable achievement in the market.
And thanks to the RBI for reducing this 100 basis point and by judiciously using our loans from the banks which were repo linked and all these things are resetted. So all these things are contributing towards the revenue. Also our revenue is growing more than 34% on year to year basis. The net profit is continuously increasing by it has increased by 13% on year on year basis the asset quality, Even the gross NPA reduced from 1.67 to 1.34%. And within 16 months of time we are trying to make the hardcore net NPA 0 NPA company. So our ratios are very strong.
If you see the spreads we are continuously maintaining around 3% name of 3% and stress of around 2% 2.2 2.3%. So we will be continue to make our efforts to maintain these kind of levels. And at the same time we will be working with the speed without taking any risk on our asset quality. Without compromising on the asset quality. If you see there are a lot of potential which are coming in the way of the company. And now we will be opening up towards the urban infrastructure also. Now the government has already announced the Urban Challenge Fund and we are continuously working with the Ministry on that.
Very soon we will be opening our offices, dedicated offices for urban financing in the regional offices. In our regional offices. That window will identify big projects and take care of the advantages under the Urban Challenge Fund. So there are a lot of things which we are expecting within a quarter to come, including the ucf. At the same time we are working with the Metros also for refinancing kind of product that let the foreign currency loan be replaced by the domestic loan. Now since these loans are coming at a very competitive pricing. So I can only say that hardcore enters into the in the remainder period of FY26 with a well capitalized balance sheet with the strong sanction pipelines and the diversified funding avenues and we will continue to sharpen our infrastructure led development.
So this is from my side as your opening remark. Thank you so much.
Questions and Answers:
operator
Thank you very much sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. A reminder to all participants, you may press Star and one to ask any questions. Anyone who wishes to ask a question may press Star and one on their touchstone telephone.
A reminder to all participants. If you wish to ask any questions, you may press star and 1. We have a first question from the line of Shweta Dartard from Elara Capital. Please go ahead.
Shweta Dartard
Thank you sir for the opportunity and congratulations on a great quarter. So a couple of questions. If I look at disbursement for the Q1 the 12,800 odd cross. So of course Q on Q basis we have done really great but if I look at year on year basis then it has remained flattish. So do we have to read your or can you elaborate and throw some color on on the momentum here and so just a follow up there, if I look at the entire FY25 so the run rate which we’ve maintained quarterly basis wherein Q1 Q2 looks slightly Q1 to Q3 looks slightly stronger and Q4 we are somewhere around 8000 plus odds at all.
So is that the trend formation now on the disbursement stack? Yeah, that’s my first question.
Sanjay Kulasek
Okay, so I think from last year we had taken an effort that all our disbursement will be regularized or uniform across the quarters. And in that effort last financial year in the first quarter we had achieved 12,000 odd crore. This financial year also we had already done more than 12,000 or 12,800. So generally in financial institution the quarter one is a bit slow and the acceleration starts from quarter two, then quarter three and then quarter four. So we had successfully reversed this exercise and because of that the turnover is continuously increasing and they are actually improving our bottom line.
So 12,800 crores is a very satisfying figure for us for which we were targeting. And with these figures also if you can directly Multiply it by 4 we will be overachieving 50,000 crores of the disbursement. So this is an indication that what, what, what’s there for this year in terms of the disbursement?
Shweta Dartard
Okay, that explains. Yeah, yeah that explains sir. Thank you. The second question, what is the lag between sanctions to disbursement?
Sanjay Kulasek
I think generally we are working with the capital intensive capital infrastructure project where the construction times starts from as low as three years to four years of the time. So sanctions to disbursement in a broader sense you can say it is around 35% but you cannot match it from the sanction to disbursement because we are now disbursing whatever sanctions before one year or two years or before three years as well. So it cannot be mapped on project to project basis. But generally it is around 35%. So here also first quarter we had sanctioned around 32,000 crores, 34,000 crores and disbursement is around 12,000.
So around 35%.
Shweta Dartard
Sure. Also some considering over 70% of our book is either guaranteed by state or through budget provisions. So we do not directly credit losses. But does project implementation delays or government capex momentum delays and execution especially from the central government led project do these or does this impair our loan growth momentum or disbursement traction if not asset quality?
Sanjay Kulasek
I think this is a very pertinent question and that’s why you can see our sanction pipeline. So whatever we are want to achieve now we are taking that into the sanctions also. If you see last year sanction was 127 lakh crores and before that it was 83,000 crores. This year around 34,000 crores. All put together we have a sanction pipelines available at hand more than 1.5 lakh crores. At the same time we have signed MoUs in the multiple states ranging to around 7 to 8 lakh crores. So we will be doing it at this pace only the disbursement I.
I have no doubt that we will be overachieving our disbursement schedule and at the same time whatever the RBA guidelines are there for the dcco we we are complying to those guidelines and all the DCCOs are being earmarked in the pension letters only and they are continuously being monitored so that there should not be any slippage. And I think our borrowers are also well versed with all these kind of guidelines.
Shweta Dartard
Right sir. And just I’m squeezing in very last question on forex losses. So I understand that there has been good amount of volatility especially in past one quarter which was led to foreign exchange losses. So how are we hedged? What is the breakup of dollar versus Japanese or any other currency denomination LED exposure and yeah. So how are we tackling this? Thank you.
Sanjay Kulasek
So company has a very clear thought out kind of hedging policy and whatever we are doing it is as per. I can give you the example. Generally we go with the data of 10 years of the currency movement and we will be very very conservative while deciding our label. And we take the one year forward levels and whatever loss we had done. You are right, it is only because of the one day movement of the chf. This is only. There is only one reason and which was not in our hand and it has crossed the 10 years 10 year cycle of the CHF.
Our hedging was done well within the ranges. Rather our forwards are very well even we had over the we had taken much ahead of one year forward levels. The protection levels were very very high. But as you have also mentioned it is only because of the the global economic scenario because of that all these losses are there. But I am sure that now we had learned our lesson and we have to live with this. With this all global facts that are happening and evolving and for all future things we are correcting our course of actions and we are monitoring on day to day basis so that these kind of phenomena should be avoided or if at all something goes bad it should be as less as possible.
Shweta Dartard
Right sir, thank you for answering all the questions patiently. I’ll join back the queue. Thank you.
Sanjay Kulasek
Thank you.
operator
Thank you. A reminder to all participants if you have any questions you may press star in one. We have a next question from the lineup. Sumit Rohra from Smartson Capital. Please go ahead.
Sumit Rohrat
Hi sir. Very good evening to you and your entire team. Firstly sir, many congratulations on a fantastic loan book growth of 30% and 8% quarter on quarter. Very, very, very heartening to see that. Just two questions. One is that you already touched upon.
operator
Sorry to interrupt you, can you please be a bit louder?
Sanjay Kulasek
Please be louder.
Sumit Rohrat
Yeah, sure. Firstly, many, many congrats, you know on a fantastic loan growth of 30% year on year and 8% quarter on quarter. Now sir, just two things I want to check with you is that you spoke a bit about you know the mark to market loss on this forex borrowing. So is my understanding correct that this is about 100 crore rupees? And third secondly if you can just talk a little bit about your names because your name is which were at about 3.2 have come down to about 2.94. So. So how do you basically see NIM shaping up from here till the end of the year, sir?
Sanjay Kulasek
So you are right, it is mark to market loss because of the currency fluctuation. It’s a one time phenomena that had happened. And regarding nims you see most of the disbursement in this quarter had happened in last 15 days. So. So they had not converted into the NIMS, they are not converted into the income but I think we will be successfully be able to maintain our NIMs more than 3% during the financial year. And you will see the corrections because this income will come in the second quarter we will be crossing 3% figure and this is a slight variation in the name that had came because of the last fortnight disbursement.
High volume of the last fortnight disbursement but I am sure that it will be recovered in the quarter two.
Sumit Rohrat
Sure. And sir, just, I mean if I can ask you one more thing. So now you know we are 45 days into quarter two broadly so as we see today is the foreign exchange kind of stuff stable? Is the, I mean, I mean are the mark to market variation stable now in this quarter at least?
Sanjay Kulasek
Yeah, they had, they had been stable as of now but you know things are very, very volatile and we all are waiting for the 15 August meeting. So but Satco is concerned CHF is well within our protection levels as of now. Dollar is going as high but our protection levels are very high. So on dollar side I don’t see any issue is there but we have to see that what happened on the 15th of August and we have a very close watch on these kind of global development.
Sumit Rohrat
And sir, I mean if I just may ask one very quick Thing So sir, I mean you are growing at a fairly fast clip, you know, as evident of the 30% growth. So sort of this loan book guidance of 1 lakh 50,000 honestly seems to be very conservative. So are you going to revise it upward now? I mean when could we have something on that?
Sanjay Kulasek
Yeah, as per arithmetic we will be crossing 150, maybe lending at around 155, 160, some something of that kind. So revision we are not done. But I think as for the arithmetic is concerned, you are right, we will be crossing this figure and after quarter two we will be revisiting and we will see that if the guidance needs to be changed. But yes, you are right, we will be crossing 150 maybe in the quarter three or sometime before that.
Sumit Rohrat
Okay, thank you. Thank you so much. I wish you all the best.
Sanjay Kulasek
Thank you.
operator
Thank you. We have our next question from the lineup. Arman from Blue sky fintech. Please go ahead.
Arman
First of all my congratulations for good setup especially the Lombok side. My just question is on return on asset.
operator
Can you please be a little louder?
Arman
Hello. Yeah, am I audible? Hello.
Sanjay Kulasek
Yeah, you’re audible now.
Arman
Yeah, yeah. First of all congratulations on great setup numbers especially growing on the outstanding book side. My question is regarding return of assets like nims. The previous question we answered return on assets also seen a clear dip in Q1. So what will be the guidance for return on assets especially for FY26 and what will be the trajectory going forward for FY27 and FY28?
Sanjay Kulasek
So I think you are talking about ROA. It had came down a bit because of the last fortnight disbursements. It’s a temporary phenomena which will be corrected in quarter two. But if you see our return on equity it is Already more than 14.28 so it will be corrected. So it’s only an arithmetic ratio. So in quarter two I think we will be again coming back to the same terms of maybe 2.2 or 2.3 kind of figure. So it is a temporary phenomena and only reason is the last fortnight disbursement. Okay, I will just like to expand the question.
Sure. If you see our main objective is to grow our loan book now because whatever we can do in the quarter one to enhance our loan book, all measures were taken so that all these income on all these ratios will be improved in this financial year only so because of this leap is there which is temporary affair. But if you see the loan book, the kind of loan book which we are, we had Successfully increased is around 8% in one quarter. So multiplication can show it is around 32%. So our main objective to is to enhance our loan asset.
Okay. Okay.
Arman
Got it sir. And my next. My next question is regarding. Regarding the already the loan book guidance which we have already told. And what how much percentage of our borrowing is floating borrowing. Around 1/3 of my borrowing is floating and around 2/3 of my borrowings is fixed rate borrowings. Of the total borrowings of 1 lakh 16 thousand crores. Okay. And for the fixed rate borrowing when is the reset is there a fixed rate?
Sanjay Kulasek
I mean all these. Basically all these bond market borrowings domestic or no, in terms of these borrowing, bond market borrowings are normally fixed. And the borrowings of short term loan borrowings and medium term loan borrowings from banks which we are taking, they are basically floating rate borrowings. Yeah. Bifurcation is around 40% is from bonds and another 20, 20% is external commercial borrowings. And the remaining is short term, medium term and long term borrowings from the banks.
Arman
Okay. Got it sir. And the similar bifurcation on the asset side floating as well as fixed.
Sanjay Kulasek
My asset side is semi fixed rate borrowing. Semi variable you can say. Or semi fixed you can say. Because all my. I mean asset side, all my lendings is semi fixed. Semi fixed. In the sense key. They all are have the option of reset either after one year or after three years. Barring loan book of around 2000 crore which is floating rate borrowings. I mean floating rate assets. Rest of the borrowings are semi fixed. Most of them are having one year reset.
Arman
Okay, so majority of our lending is having a one year reset, right?
Sanjay Kulasek
Yeah, majority. Yes.
Arman
Thanks a lot. Thank you.
operator
Thank you. We have a next question from Lino Gaurav. Coaches from mlp please go ahead.
Lino Gaurav. Coaches
Yeah. Hi sir. Good evening. Thanks. Thanks for the opportunity. Sir, I have three questions. First is on the sanction pipeline you indicated that you have currently sanction pipeline of 1.5 trillion which has not been disbursed yet. So just wanted to understand by when do we expect this to be disbursed? I understand there will be further sanctions that will come through the year. But this on this 1.5 stock of the sanctions that we have by when do we expect the this to get disbursed or what is the timeline by which your sanction sanctions get disbursed?
Sanjay Kulasek
It is around three years. Three to four years of the time. The complete disbursement out of this 1.5 lakh crores will be there. And in the meantime we will create the further strong commitment of the sanction.
Lino Gaurav. Coaches
Sure, sure, understood. So theoretically, even if you don’t sanction anything from here on, this 1.5 billion is good enough to give you 50,000 crore kind of disbursement every year for the next next three years. Theoretically. Okay, okay, sure, sure. And so second is on the size of the opportunity. Now infra power and all these sectors, I mean there are a lot of players both government and private including banks. So if you can just highlight on what is the size of opportunity and for us you know how there would be two scenarios. One would be where most of the government agencies, banks, all of them are competing and there would be certain projects where the competition is very little and we have some unique positioning over there.
So if you can highlight both these aspects as to what would be the size of the opportunity where we are uniquely positioned maybe over the next one or two years and the size of the opportunity where there is intense competition from banks.
Sanjay Kulasek
I can give you only one example. There was a program of government of India the National project pipeline which was created in 192019 till 2024. Now it was 1.11 lakh crore pipeline. It is revised by 1.6% recently. So this is the one guidance that I can give you in terms of the creation of the infrastructure. But if you see the Crisil and the McKinsey report they are talking about total investment of 300 more than 300 billion USD across the different sectors. So the pipeline is very high and I think all the lenders have a have a space to cater.
Only thing is that some of the institutions are segment based. They are working for one segment or two segments. Hardcore is a company which is not agnostic to any sector and we are funding to each and every sector. We are serving the requirement of state government. In some states the roads may be the priority but in other states the river linking is a priority. In some states new towns are coming and in some states the satellite towns are coming. So all these things are giving a clear arbitrage and clear roadmap sort the Hutco business model.
But I’m sure that all the institution be the energy transition or be the mobility. All these things are contributing and the main driver is the urban. So all these things are created and starting from the hut co and since we are funding from the housing to all the entire gamut of the urban infrastructure without having bar on any sector. So we are I think very comfortably positioned and we can choose our right to select good project, good Entities good asset quality. And that’s what we are doing.
Lino Gaurav. Coaches
Understood? Understood. And so sir, in that context if your last year sanction was 1.27 lakh crore this year can we expect 1.5 lakh crore plus kind of sanctions? 34,000 plus is already done. So is that a fair ask that maybe 1.5 trillion is where we should be in terms of total sanctions for this year?
Sanjay Kulasek
Yeah, it will be something more than 1.27. That’s what I can say. We had not devised any figure as of now. We are working on lot of opportunity. Our main target is the disbursement. Generally target our disbursement. So that is already decided.
Lino Gaurav. Coaches
Okay.
Sanjay Kulasek
And it will come out of the pipeline. Our directors.
Sanjay Kulasek
I just would like to add one sentence here. So if you see that in line with Vikshit Bharat, most of the states, majority of the states are also coming like Maharashtra for instance. I would like to give a small example. Recently they have come up with Vision Maharashtra 2047. So most of these big big towns especially nasty Nagpur, Pune, these towns, they’re coming out of the beautiful project. Let me give you only one example of Nagpur. They’re creating a new city called Naveen Nagpur just on the outskirt which is on the way and the main highway of Nagpur to Mumbai expressway plus golden arc ring road they are being created like many examples we can quote it the state of Maharashtra.
Similarly Tamil Nadu recently had invest Tamil Nadu again invest Karnataka. So each state is competing with each other. So there is a huge potential exists. So ADCO continues to get tarred by especially in infra.
Lino Gaurav. Coaches
Thank you. Sure sir, sure. And sir, just to understand your margin Dynamics, you said 1Q typically because the disbursements were toward the fag end of the quarter that resulted in yield moderation, it will improve going forward. So sir, just. Just to understand what would be the incremental yield that we would be sanctioning or disbursing at. So let’s off the of the amount that you have sanctioned or of the amount that you have disbursed, what would be the blended yield and whether that yield would be similar to what our book yield is.
Sanjay Kulasek
See we are into the era of discounting on repo rates and which can be clearly seen and visible from the borrowing. So I think at this point of time talking about the yield of say 9.5% may not be right. But yes, the keeping our spreads and the NIM constant or healthier that is more important for us. So since we are also reducing our cost of funds. And at the time of reset we are passing to our borrowers Also because we firmly believe that whatever infrastructure is created in the country has to be paid by our citizens also it should be more viable, more sustainable.
Then only the assets are fruitful. They will be good for country. So here the yield may be corrected because of the reduction in the repo rate. Maybe around 9.1, 9.2 will be the yield. That’s what I can foresee. As of now we are also expecting some rate cuts on Repo which will further redefine the yields. We are also expecting something from the Fed side, US side because we are planning our MTN program. So all these things are dependent on such kind of.
Lino Gaurav. Coaches
Understood. So sir, if I just said it correctly, the spread is still maintained. So whatever benefit we get on our cost of fund that we pass on to our borrowers, cost spread is maintained even on incremental. You mentioned.
Sanjay Kulasek
Unlike the bank, on the date of reduction of the repo we passes on the one year reset on the basis of one year reset. One year reset.
Lino Gaurav. Coaches
Got it.
Sanjay Kulasek
Enhance the income for the time.
Lino Gaurav. Coaches
Right? Understood. Understood. And sir, on our cost of fund I think you mentioned 6.32 as the incremental borrowing for 20,000 crore is. Did I hear that correctly?
Sanjay Kulasek
6.3. Yes, you are correct. This is for the first quarter. The. The average rate that we borrowed. Yes, you are.
Lino Gaurav. Coaches
Okay. Okay. And sir, the. The second repo rate cut happened in June. So is it fair to say that the incremental borrowing cost would further come down. The 6.32 was average for the quarter. So this. This number would have even fallen to slightly lower number in July. August. Is. Is that a fair understanding?
Sanjay Kulasek
Actually transmission. If you see on a long term basis it had not happened for 10 years on. We had made this study. The past discount is only 20 basis points as of now. But as you know that the CRR is reduced after September and other form of community will come to the market. We are also expecting that some correction will in the bond market. Bond market will happen.
Lino Gaurav. Coaches
Sure, sure. Got it. And so what percentage of your borrowings would be linked to G sec? 10 year G sec. And what percentage would be repo in your floating rate liabilities and second derivative to this is what would be the average duration of your liabilities.
Sanjay Kulasek
So we didn’t go for the G Sec. We only go for the repo because strategically we had decided that since the loans are linked with the repo. So the. On the day of the reduction they will be detected. And what was the second question?
Lino Gaurav. Coaches
Percentage? Around 15.
Sanjay Kulasek
Percentage of.
Unidentified Speaker
Yeah, I. I am. I’m Daljit Singh Khatri, Director of finance. Your second question was paramount. Regarding what percentage of my borrowings is linked to repo rate. So around 20. Around 20% of my borrowings represented by bank term loans is linked to repo rate.
Lino Gaurav. Coaches
Okay. And on your fixed rate borrowings, what would be the average maturity rate?
Sanjay Kulasek
Average maturity is five years. We normally raise three years, five years and 10 years. But the average remaining maturity on my fixed rate borrowings is around 5.5.5 years.
Lino Gaurav. Coaches
Understood. Understood. Thanks. Thanks so much Sir. Just last question. On the the target of 0 NPA or net NPA and we still have some pool of npa. So in terms of resolution maybe in the next one or two quarters do you see any resolution in advanced stages? We saw some recoveries in this quarter. So do you expect some recoveries in the second quarter as well?
Sanjay Kulasek
Yeah, we are working on that. Definitely.
Lino Gaurav. Coaches
Okay. And any sort of amount that you can quantify what kind of recoveries we can expect in the second quarter.
Sanjay Kulasek
See all these NPAs are more than 20 years back. So I cannot say what will happen for this. But I can tell you for the for the financial year that the figures will be very very healthy. Because if you see around 1157 crores of our NPA loans are under different stages of the NCLT on only. And either the liquidation or the resolutions orders has already been passed. Only thing is that we are waiting for the approval of the lenders and the bankers. There are some few minor issues so I cannot describe in the timelines. But yes, of course in six months I think lot of things will be coming on.
Lino Gaurav. Coaches
Understood. Thank you so much sir for answering all my questions and all the very best.
operator
Thank you. We have a next question from line off name in Doshi from GOG pms. Please go ahead.
Doshi
Yeah. Hi sir. Thanks for the opportunity. Firstly sir, any. Any update on our PMA, PMA PMEY 2.0 disbursement side that will be seeing the growth in disbursement in this financial year or in the coming financial year.
Sanjay Kulasek
Yeah, actually 2.0 has been designed in such a way that all the states have to identify under 23 verticals especially BLC beneficial link 1. Second one is in CLSS. So majority of the states are now they started sanctioning maybe in Q2, Q3 we will have a major sanctions and disbursements as of now it is yet to pick up so gradually it is. Progressing so right see PMA why around 7 lakh householders are already sanctioned by the ministry and then the applications of around 50 lakh households are spending with them. Maybe within this month these will be sanctioned and after sanctioning it will go to the state and then they will come out with their counterpart requirement. At the same time they have to come out with the beneficiary contribution. So see under PMA why this is the most vital thing that is that is there now in the guidelines that beneficiary has also needs to contribute for creation of that house.
So states to state these figures are different. They are working on that what kind of beneficiary contribution will be there. But from the government of India side 2.5 lakh has already been sanctioned for 7 lakh households and 50 lakh households are under the pipeline of the sanction. So I’m sure that by quarter three or quarter four the states will start identifying their counterpart requirement and coming back for funding from.
Doshi
Got it sir. With respect to this PMA so can we assume, can we say that the growth in the disbursements if at all the PMAI disbursement happens in this financial year our growth of the given guidance of the current run rate of disbursement would surely exceed is excluding the PMAY disbursements if any.
Sanjay Kulasek
We are excluding the PMay disbursement because PMay disbursement is dependent on many factors so we had not taken into account. So whenever they are get quite matured and then whenever the states are coming then only I think we will be factoring in. But as of now we had not factored in into our figures.
Doshi
Fair enough. Last question from my side sir. With respect to our liability side do we see any further benefit coming in towards the FAG end of this quarter or next quarter with respect to cost of borrowing side especially with respect to our since our loan growth is growing so far so do we see any further capital raise at low cost? And at what levels will we be comfortable on our debt to equity side?
Sanjay Kulasek
I think 6.32 figure is quite competitive to achieve and we had already achieved. So now we will be competing with ourselves only. So we are talking with other banks also regarding the squeezing the spreads also. But there is some bottom line so I think we are very nearing to our bottom line at this phase. And if the rapport rate is reduced which is which I foresee that it may come or this tariff settlement had happened then of course there is always a a space of correction. But all these Things needs to be settled first.
Doshi
Got it, sir. Thank you so much. That’s it for my guys. Thank you so much.
operator
Thank you. We have our next question from the line of Raghu from Travis Capital. Please go ahead.
Raghu
Hi. Thanks for the opportunity. I really haven’t looked at your presentation in which you have mentioned earlier. Also the incremental cost of borrowing is 6.32 for the quarter. I just have a small doubt because in the section of bank loans the short term 11,992 crores. The average cost is 6.24%. Please correct me if I’m wrong. The bond yield presently is something on 6.2. 6.3. How are we getting a bank loan of 11,000 crores at 6.2? Am I missing something here?
Sanjay Kulasek
No, no, you are not missing anything. Because the repo has reduced. Now the repo is around 5.5. So we are getting at a very competitive terms from the banks. So it is only the skill of the negotiation that we had achieved this kind of short term rates from the banks. And see if you see from the banker side they have lot of exposure left with the. Which is not there with other institutions. So. So we are taking that kind of advantage of the exposure limits which is available with the banker. No. But is the place. Really the question I was having this Government of India is paying 6.3 to borrow for its loans. The bank is lending at 6.24.
Raghu
Right. Somehow seemed odd to me. So that is the reason I’m asking. So is there a fixed percentage bank should lend for this priority sector. And Hutco comes under that. That’s why they are giving us this loan or what is the reason?
Sanjay Kulasek
I think there is slight correction. These are short term loans of one year. Right. And government of India is taking the SDLs which are of around five years or 10 years of the time. So their rate cannot be compared with these rates. So our long term rate. If you see. If you compare the bond rates. We had taken a five year loan. Bond bond at around 6.64%. So it can be compared with the five year borrowing of the state government.
Raghu
Okay. Okay. And the reason for taking the short term bond. Is there any specific reason why are we doing that?
Sanjay Kulasek
Will it cause any. We are doing our. Actually we are doing our treasury management. And we are looking at the markets to settle down so that these can be converted into the long term. So whatever advantage we can take during this time gap that’s what we are taking.
Raghu
Sure. Thank you so much. Thanks for the clarification.
operator
Thank You. Thank you. A reminder to all participants, if you wish to ask any questions you may press Star and one. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. We have a next question from the line of Parth from Dam Capital. Please go ahead.
Unidentified Participant
Thank you sir for the opportunity. Am I audible?
Sanjay Kulasek
Yes, Parth.
Raghu
So my question is on growth again. So sir, as you rightly mentioned that we are sector agnostic. There is abundant opportunity. We will be financing even in urban financing and PNY 2.0. So with a large time available, unlike many other peers here in the same sector or in the government undertaking. Sir, do you think there would be an upside risk to our growth projections for FY30 as well? So we target 3 trillion by FY30. But do we think we would achieve a march before FY30 since there’s a huge opportunity available and we expect our dispersement census to remain very healthy from here on.
Sanjay Kulasek
Yes, that’s what I was talking that for this year we will be overachieving the targets which we had set around 1.1 and a half years back. So I think there is still some time left till 2030. So we will be revising in the third quarter looking at the pace of the PMAY. Because under PMA why we are still to confirm what kind of disbursement the states will be taking. So that is only the. That is only the questions that that is unanswered. Otherwise our our sheets are fully filled and we are ready to come with the targets only.
We need to fill this PMAY figure. So even though the PMAY triggers in the late 27 or 28, even though we will be achieving that 3 lakh crores and the corrections will be made looking at the PMAY progress.
Raghu
Okay, Got it. Sir, you mentioned that there is a lot of opportunity for getting opened in the urban financing sector. So what are the kind of projects you would typically target and how big that opportunity would be for you?
Sanjay Kulasek
Till now also whatever we are doing, it’s in the urban segment only. But now this opportunity of urban Challenge fund is coming up. Honorable Finance minister has announced during her budget speech which is a subsidy of 1 lakh crores will be extended by the government of India to the states. The 1 lakh crores has to be arranged by the states either through loans or their own accruals or through FDI or some municipal bonds or hudco loan or multilateral loan. And for 2 lakh crores they have to identify the PPP player. So the private sector will also be there.
So it’s a unique kind of model where the state government, government of India and the private player will be there. And for this 50% they have to make the projects bankable so that the bank loan or the lenders loan will come to that segment. So we are now we have started the private sector funding also. We had made our guidelines for entity as well as the as well as the sector. So we had already approved the guidelines for road and real estate and times to come we will be sanctioning our guidelines for port, airport and energy transitions also.
So I think this is a place because under UCF the state government will be requiring some funds that we will be doing at the same time the private player to make that project bankable. That bankable project we will be funding maybe a private sector project. It is a very huge opportunity that is that will be coming in next three to four years of the timeline. So that’s what I was talking about.
Unidentified Participant
Got it sir. That’s really helpful. Thank you. That’s it. And all the very best sir.
Sanjay Kulasek
Thank you.
operator
Thank you. A reminder to all participants, if you wish to ask any questions you may press star and 1. As there are no further questions from the participants I now hand the conference over to the management for closing comments.
Sanjay Kulasek
Thank you Sankit and thank you dear friends for joining. So I hope that we had been able to answer your queries to your satisfaction. Only thing is that I can assure you that we will be correcting ourselves during this financial year only. Whatever guidance that we had made to the market we will trying to overachieve that kind of guidance and looking at the opportunities available across the country and the kind of business model and the kind of confidence of the stakeholders, I’m sure that we will be over achieving. And regarding NPA we are very serious that we solve all our assets which are under NPA even though the figures are very, very less.
But at the same time we need, we want our books to be cleaned up. At the same time we will continuously lean towards reducing our cost of funds. Maybe different currencies will be there. We will continue to review our hedging policies and monitoring will be on the day to day basis to avoid all such kind of things. Even though the global uncertainties will be there and the compliance will be the most most relevant part that we will not compromise on the compliance of the RBI or SEBI or whatever statutory agencies are there. So this is all for first quarter I think and let’s wait for the second quarter to come and I can assure you that second quarter will be much better than whatever we are discussing.
Thank you so much.
operator
Thank you, sir. On behalf of Dan Capital Advisors, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.