Daljeet Kohli of India-Nivesh Securities told CNBC-TV18, "LIC Housing Finance is a slightly contrarian kind of pick within the non banking financial companies (NBFC) space. The first question that comes to mind is that this company does not have any source of funding which is cheap. They are actually dependent on market borrowings and there is so much of volatility, so how will they maintain their margins. This is not the first time they are going through this phase. They have been here in existence for a very long time. They have a very strong pedigree and have LIC backing. So, all those issues can be tackled."
He further added, "Why I am bullish on this stock is that there is a big trigger point. They are one of the strong contenders for bank license. I don’t know whether they will get it or not, but they are definitely one of the strong contenders. For others who are in that list there are many ifs and buts and whether positives or negatives. For them there is only one thing which is positive because that gives them an opening to the cheap source of funding and LIC has a lot of big float available."
"The stock is right for a re-rating depending upon the newsflow. Even if that re-rating doesn’t happen one is buying a housing finance company at 1.1-1.2 times of adjusted book value which by all standards is very cheap. So, it is going to remain inline for very long time. There is no question on the fundamentals or the long-term growth of the company. Valuation is cheap and in one's favour. So, one should be buying this stock," Kohli said.
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