Contrasting tale of housing finance companies HDFC and LIC HFC -- which one should investors bet on?
The already battered stock of LICHF corrected further following the announcement of its June-quarter earnings pushing it to distressed valuations
August 03, 2021 / 12:06 PM IST
Indiabulls Housing Finance | Societe Generale bought 33,91,400 equity shares in the company at Rs 278.44 per share on the NSE, the bulk deals data showed.
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Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook
The valuations of the two largest housing finance companies (HFCs) present a picture of stark divergence. LIC Housing Finance (CMP: Rs 407; Mcap: Rs 20,577 crore) is trading at a discount of over 50 per cent to the market leader HDFC (CMP:Rs 2,462; Mcap: Rs 444,630 crore).
To be sure, LICHF has always traded at a discount to HDFC but the second largest HFC is being valued below its one-year forward book value. This is perplexing as home loans are...