 "LIC Housing, Dewan Housing, Gruh Finance hit 52-week highs")
Shares of housing finance companies are in focus with LIC Housing Finance, Dewan Housing Finance Corporation and Gruh Finance trading at their respective 52-week highs on the BSE.
“India is expected to witness a robust housing finance growth going forward as the mortgage penetration in India remains at very low levels at 9% to GDP as compared to the developed countries where it is in the range of 60-100%,” Angel Broking said in a note.
LIC Housing Finance (LICHF) has surged 6% to Rs 553, also its record high on the BSE. In past two-months, the stock outperformed the market by gaining 17%, as compared to 5.5% rise in the S&P BSE Sensex.
“For companies like LICHF, the funding environment has eased; thus it will lead to lower cost of borrowing, while outlook for growth in retail housing loans remains positive, going forward. We expect the company to post a healthy loan book CAGR of 19% over FY2016-18E, which is likely to reflect in earnings CAGR of around 20%, over the same period,” said brokerage firm in a note.
According to analyst at Motilal Oswal Securities, the mortgage market remains in a hyper-competitive mode, which is affecting growth. However, given the continuous decline in wholesale rates and stable yields (supported by strong growth in high-yielding LAP), LIC Housing Finance is able to report superior spread and margins, resulting in strong earnings growth.
Dewan Housing Finance Corporation (DHFL) was up 4% at Rs 268 on the BSE in intra-day trade. Since August 3, the stock rallied 20% from Rs 224, after the company’s maiden public bond issuance worth upto Rs 4,000 crore attracted huge response. Gruh Finance gained 2% at Rs 313 on the BSE in intra-day trade.
DHFL on Thursday said its board is scheduled to meet on August 17, 2016, to consider fund raising by way of public or private issue of secured or unsecured debt in India or abroad.
“DHFL’s nearly 70% of the bank borrowings are due for maturity over the next three years and swapping a part of that with non-convertible debentures (NCDs), where it has around 100 basis points cost benefit, will help DHFL in maintaining its net interest margin (NIM) at around 2.9%,” said Angel Broking in August top picks report.
“India is expected to witness a robust housing finance growth going forward as the mortgage penetration in India remains at very low levels at 9% to GDP as compared to the developed countries where it is in the range of 60-100%,” Angel Broking said in a note.
LIC Housing Finance (LICHF) has surged 6% to Rs 553, also its record high on the BSE. In past two-months, the stock outperformed the market by gaining 17%, as compared to 5.5% rise in the S&P BSE Sensex.
“For companies like LICHF, the funding environment has eased; thus it will lead to lower cost of borrowing, while outlook for growth in retail housing loans remains positive, going forward. We expect the company to post a healthy loan book CAGR of 19% over FY2016-18E, which is likely to reflect in earnings CAGR of around 20%, over the same period,” said brokerage firm in a note.
According to analyst at Motilal Oswal Securities, the mortgage market remains in a hyper-competitive mode, which is affecting growth. However, given the continuous decline in wholesale rates and stable yields (supported by strong growth in high-yielding LAP), LIC Housing Finance is able to report superior spread and margins, resulting in strong earnings growth.
Dewan Housing Finance Corporation (DHFL) was up 4% at Rs 268 on the BSE in intra-day trade. Since August 3, the stock rallied 20% from Rs 224, after the company’s maiden public bond issuance worth upto Rs 4,000 crore attracted huge response. Gruh Finance gained 2% at Rs 313 on the BSE in intra-day trade.
DHFL on Thursday said its board is scheduled to meet on August 17, 2016, to consider fund raising by way of public or private issue of secured or unsecured debt in India or abroad.
“DHFL’s nearly 70% of the bank borrowings are due for maturity over the next three years and swapping a part of that with non-convertible debentures (NCDs), where it has around 100 basis points cost benefit, will help DHFL in maintaining its net interest margin (NIM) at around 2.9%,” said Angel Broking in August top picks report.