Neelkanth Mishra of Credit Suisse says housing finance company stocks have gone up by nearly a third each in the past six months.
Housing credit as a percentage of non-food credit at 11.8 percent is at levels last seen in July 2008, but below the 13.3 percent peak. Further, housing loans as a percentage of total in India are among the lowest in the world, he says.
Mishra expects both these trends, falling/low rates supporting home loan growth and a sclerotic banking system allowing interest margins to sustain. Pay commission will further support growth, he feels.
He remains positive on LIC Housing Finance, HDFC and Indiabulls Housing Finance.
Meanwhile, Anish Damania of IDFC says the trend of positive surprises and operational strength has continued so far in Q1FY17.
Based on operational performance in Q1FY17, top buys within Nifty are Zee Entertainment, SBI and HDFC Bank, he adds.
Damania also prefers Tata Motors and Aurobindo Pharma that are yet to report results. Top sells are Dr Reddy's Labs, HCL Technologies and Hindustan Unilever.
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