HUDCO drops 12% in six days

Housing and Urban Development Corporation (HUDCO) tumbled 2.69% to Rs 30.75, falling for the sixth consecutive session.

Shares of HUDCO have lost 12.77% in six trading sessions from its recent closing high of Rs 35.25 on 14 September 2020. In last one month the counter has lost 18.33% compared with 1.43% fall in BSE Small Cap index.

On the technical front, the stock's RSI (relative strength index) stood at 26.005. The RSI oscillates between zero and 100. Traditionally, the RSI is considered overbought when above 70 and oversold when below 30.

The stock is trading below its 50-day and 100-day moving average (DMA) placed at 35.39 and 31.10 respectively. These levels will act as resistance zones in near term.

Selling pressure was intensified after the company announced dismal Q1 June 2020 result on 14 September 2020. The company's consolidated net profit dropped 39.4% to Rs 203.38 crore on 1.9% decrease in total income to Rs 1781.79 crore in Q1 June 2020 over Q1 June 2019. In order to mitigate the burden of debt servicing brought about by disruptions of business activities, HUDCO granted moratorium of three months on repayments falling due between 1 March 2020 and 31 May 2020, to the eligible borrowers, as allowed by RBI guidelines on 27 March 2020 and 17 April 2020.

HUDCO is up 70.3% from its 52-week low of Rs 18.05 posted on 24 March 2020. The counter is 48.6% away from its 52-week high of Rs 45.7 registered on 14 November 2019.

HUDCO provides long term finance for construction of houses for residential purposes or finance or undertakes housing and urban development programs in the country. The Government of India holds 89.81% stake in the housing financer as on 30 June 2020.

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