SBFC Finance jumps 18%, hits new record high as ICRA upgrades outlook to 'stable'

Shares of SBFC Finance surged over 18% to reach an all-time high of ₹104.35 per share on September 23, 2024, following a credit rating upgrade by ICRA. The credit rating agency upgraded the company's long-term, fund-based term loan of ₹2,100 crore to 'AA-' with a stable outlook, up from the previous rating of 'A+'. ICRA also upgraded and withdrew SBFC's long-term, unallocated fund-based bank lines worth ₹1,400 crore, assigning the same 'AA-' stable rating.

This rating signifies very low credit risk and strong confidence in the company's ability to meet its financial commitments on time. The stock saw a substantial increase in trading volume, with approximately 7 crore equity shares exchanging hands on the BSE and NSE, far exceeding the one-week average of 37 lakh shares.

In the June 2024 quarter, SBFC Finance reported a 68% year-on-year increase in net profit, reaching ₹79 crore, up from ₹47 crore in the same period last year. Revenue from operations also increased by 30% YoY to ₹298 crore, compared to ₹229 crore in Q1FY25.

SBFC Finance is a non-deposit-taking NBFC (Non-Banking Financial Company) that primarily caters to entrepreneurs, small business owners, self-employed individuals, and salaried or working-class customers. The company offers secured MSME loans and loans backed by gold, positioning itself as a key lender in this segment.

Currently, four brokerages cover SBFC Finance stock, with three recommending a 'buy' and one suggesting a 'hold'. Despite the recent surge, SBFC Finance's shares have risen by 19% over the past year, underperforming the Nifty 50 index, which grew by 31% during the same period.

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HUDCO Stock Surges 10%: A Powerful Rebound After Losing Streak

Shares of Housing and Urban Development Corporation (HUDCO) soared by up to 10% on September 20, 2024, effectively snapping a troubling five-day losing streak. This resurgence comes after the stock experienced a decline of nearly 10% during that period.

Volume Surge
The recovery was marked by a significant increase in trading volumes, with over 3 crore shares changing hands on both the BSE and NSE. This is a dramatic rise compared to the one-month average of just 1 crore shares, indicating heightened investor interest and activity.

Impressive Yearly Performance
Over the past 12 months, HUDCO's share price has skyrocketed by an impressive 236%, vastly outperforming the Nifty, which has risen only 27% in the same timeframe. This substantial increase positions HUDCO as one of the standout stocks in the market.

New Loan Assistance Potential
A key factor contributing to HUDCO's recent surge is its announcement of potential loan assistance under the Pradhan Mantri Awas Yojana - Urban 2.0 (PMAY -U 2.0) scheme. The PSU aims to extend loan assistance ranging from ₹75,000 crore to ₹1 lakh crore, building on its previous disbursement of over ₹42,000 crore under the earlier phase of PMAY.

Infrastructure Finance Expansion
In August, HUDCO received the Reserve Bank of India's approval to register as an Infrastructure Finance Non-Banking Finance Company (NBFC). This new status allows the company to increase its exposure limits for financing various infrastructure projects, which is expected to enhance its growth potential significantly.

Strategic Partnerships
Moreover, HUDCO recently signed a memorandum of understanding (MoU) with the Yamuna Expressway Industrial Development Authority (YEIDA) to provide long-term financial assistance for projects along the Yamuna Expressway. This partnership emphasizes HUDCO's commitment to supporting urban infrastructure development through diverse funding solutions.

Current Trading Status
At 2:50 PM, HUDCO shares were trading at ₹248 on the NSE, reflecting a 7.6% increase. Year-to-date, the stock has rallied 92%, nearly doubling investors' money compared to the Nifty's more modest returns of 16%.

Conclusion: A Stock to Watch
HUDCO's remarkable rebound, combined with its strategic initiatives and impressive annual performance, makes it a stock worth monitoring closely. As the company continues to navigate the dynamic landscape of urban development financing, investors are keen to see if this momentum can be sustained.

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