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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
Contrasting tale of housing finance companies HDFC and LIC HFC -- which one should investors bet on?

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.

PRO Only Highlights
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...

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