5-10% correction in housing fin cos make them attractive:Analyst

Banks are bracing for a bad third quarter as they are forced to focus their resources on managing the impact of government’s demonetisation, according to Suresh Ganapathy, Banking Analyst, Macquarie Capital Securities. Banks’ priority to ease the pain of the common man is likely to dent the prospects of launching new products, he said.

Investors, Ganapathy said, should look to buy into any correction in housing finance stocks. Large housing finance companies (HFCs) are more favourable in this market, he said, adding that a 5-10 percent estimated correction from the current levels can make it attractive.

He cautioned that a larger impact of demonetization is on non-housing finance segments like CV financing, gold financing and microfinance companies. Such companies may have to rejig their business models to blend into cashless economy, he said.

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