Hudco, NBCC, Can Fin Homes: Affordable housing stocks fall up to 12% on lower capex in Budget 2025

Hudco, NBCC, Can Fin Homes: Affordable housing stocks fall up to 12% on lower capex in Budget 2025

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26 Aug, 2025 12:21

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Shares of affordable housing finance companies, including Housing and Urban Development Corporation Ltd (HUDCO) and Can Fin Homes, fell sharply on Monday after the Union Budget 2025 disappointed market expectations on higher capital expenditure in the sector.

The government allocated Rs 11.21 lakh crore towards capital expenditure for FY26, reflecting a marginal increase of 0.9 percent over the previous year. Analysts had anticipated a higher outlay to support the affordable housing segment.

HUDCO shares plunged 12.05 percent to hit an intraday low of Rs 191.21 on the National Stock Exchange (NSE). However, Elara Capital analysts have maintained a 'Conviction Buy' rating on HUDCO, citing key positives from Budget 2025. The firm noted that the budget announcements are expected to support a sustained rise in the company's loan trajectory in the coming years. Analysts believe HUDCO is well-positioned to surpass its FY26 loan target of Rs 1,50,000 crore.

Shares of Can Fin Homes Ltd declined 3.4 percent, touching a fresh 52-week low of Rs 638.25 on the NSE amid investor concerns over subdued policy support for the housing finance sector.

Market experts noted that ahead of the Budget, industry stakeholders had suggested increasing the house value cap under the Pradhan Mantri Awas Yojana (PMAY) from Rs 35 lakh to Rs 50 lakh in metro cities to make the scheme more effective. However, no such measure was announced in the Budget.

Affordable Housing stocks fall as Budget 2025 lowers capex to Rs 10.1 lakh crore in FY25

Additionally, expectations were high that the government would revisit home loan interest deduction limits to provide relief to buyers and boost demand. The absence of any revision in this regard further dampened sentiment in the sector, analysts said.

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