200% return in six months: Brokerage suggests buying this Navratna PSU stock, check target price

On Saturday, May 18, domestic equity benchmarks Nifty50 and Sensex ended with mild gains in the first of two special trading sessions led by buying interest in IT, financial and energy shares.

Stock exchanges BSE and NSE conducted the sessions to check their preparedness to handle major disruption or failure at the primary site, and a consequent switchover to the disaster recovery site.

Meanwhile, let's take a look at brokerage house Elara Capital's call on buying this Navratna PSU stock. 

PSU Stock to buy

The brokerage suggested buying Navratna PSU stock Housing and Urban Development Corporation (HUDCO). The target has been kept at Rs 297.

On May 18, 2024, the shares of the company closed at Rs 244.4 each, up 1.3 per cent from its previous close (May 17). In this way, the stock can rise more than 21 per cent from the current price.

The brokerage says that with a 15 per cent loan CAGR in FY23-30E, HUDCO shows its strong presence in India's infrastructure and housing sector. Government schemes like Pradhan Mantri Awas Yojana, Smart City, and Jal Jeevan Mission, it is the beneficiary of all these. Its credit rating is AAA and the international credit rating is equal to the sovereign rating. The loan book of the company is more than Rs 85,000 crore. The fundamentals of the company are very strong.

"HUDCO is demanding scarcity premium for being the biggest beneficiary of GoI thrust on housing/infra, its niche business model characterized by high entry barriers, information asymmetry, distribution arbitrage backed by its liaison with GoI and Management stability all of which is supportive of strong business visibility," the brokerage said.

HUDCO stock performance

HUDCO shares have rewarded investors with a return of over 327 per cent in the past 12 months. The company's shares have jumped almost 90 per cent on a year-to-date (YTD) basis and provided more than 195 per cent returns in the last six months.