Prefer LIC Housing Finance: Suresh Ganapathy

Suresh Ganapathy, banking analyst at Macquarie Capital Securities told CNBC-TV18, "In housing finance companies, the biggest advantage is the fact that the growth is somewhat secular in the sense that you can still have an 18-20 percent kind of a loan growth; there is still quite a bit amount of demand there. Unlike the other banks in the country they don’t have any issue of NPLs as well as capital at this point of time. So, that is the reason the earnings visibility is very high and we do recommend going overweight in housing finance companies."

"The problem is that in some cases the valuations are pretty uncomfortable or very high and therefore it is very difficult to recommend them. However, considering the risk reward at this point in time, we would be a bit more favourable towards LIC Housing Finance which could be the preferred way to play the housing finance companies," he added.