Housing Finance Companies with retail focus will continue to see strong growth: Angel Broking

Housing Finance Companies with retail focus will continue to see strong growth, while pvt banks with retail focus will see loan growth accelerating

In the earlier scheme, the interest subvention was available only for loans up to `6 lakh, while the balance amount was supposed to be borrowed at the normal rate of interest. Looking at the high property prices in urban area, the amount looked small and hence was not enough to encourage for buying new homes. However, with the recent rise in slab, on one hand and lower overall home loans rates, on the other hand should help in meeting the needs of the LIG.

HFCs with focus on retail loans have done fairly well in the last few years. While incrementally, there will be more competition in the industry, we believe there is enough scope for all the players to grow. Further players like DHFL, which are largely focused on the LIG/MIG segment, should see higher incremental demand in the medium term. We continue to have a BUY rating on DHFL and LIC Housing.

In the banking space, we believe among the PSU, SBI will lead the way backed by sustainable low cost deposit base. SBI is already a formidable player in the home loan segment (2nd after HDFC Ltd) and in the absence of industrial credit demand it could become aggressive in selling home loans. We continue to remain constructive on the retail oriented Pvt Banks and have a BUY rating on ICICI Bank and Axis Bank and an ACCUMULATE rating on HDFC Bank.

Source : Equity Bulls

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