Housing Development Finance Corporation, India’s largest mortgage lender, has largely remained a mute spectator in the bull run in the Indian stock markets during the past 18 months.
“HDFC has underperformed the NIFTY Bank/Property index by 15 percent/40 percent over the last one year due to multiple concerns over fundamental business drivers due to competitive headwinds, as well as asset quality challenges during the pandemic,” global brokerage Goldman Sachs in a recent report.
The contribution of core mortgage value to market capitalisation remains depressed at 45 percent but this could change as business prospects for core mortgages improve, the brokerage added.
Brokerages attributed the underperformance to factors such as the current growth in home loans due to low interest rates. Experts said disbursements are likely to face headwinds once the interest cycle reverses.