Shares of Housing Development Finance Corporation Limited (HDFC) hit a seven-month high of Rs 2,852, up 3 per cent on the BSE in the intra-day trade on Tuesday, on anticipation of pick up in business growth. The upcoming festive season is expected to see a growth in real estate sales, analysts say.
The stock of the largest non-banking finance company (NBFC), engaged in housing finance business, was trading at its highest level since February 2021. It is less than 2 per cent away from its record high level of Rs 2,895, touched on February 16, 2021.
The stock has underperformed the market by gaining 12 per cent in the past six months, as compared to a 16 per cent rise in the S&P BSE Sensex. Meanwhile, over the three months, it gained 10 per cent against a 12 per cent rise recorded by the benchmark index.
While announcing April-June quarter (Q1FY22) results on August 2, HDFC had said that the demfor home loans continues to remain strong disbursements had picked up with the unlocking of respective locations. “While disbursements during April May of the current financial year were somewhat impacted, business has reverted to normalised trends in the months of June July. July 2021 disbursements were the highest ever in a non-quarter end month,” the company said.
Given this, analysts at ICICI Securities had said that HDFC had demonstrated a consistent performance in terms of both business growth as well as asset quality. “Market leadership, funding advantage adequate capital lead us to remain positive on fundamentals,” they had said.
It added: HDFC have funding advantage adequate capital to aid growth & earnings. The healthy provision buffer & improvement in collection to aid asset quality. The brokerage has a ‘buy’ rating on the stock with target price of Rs 3,100 per share.
According to Rohit Poddar, Managing Director, Poddar Housing Development, buyers are preferring townships projects that are at proximity to social healthcare amenities. This trend is going to further boost housing demin central western suburbs when it comes to Mumbai.
On the other hand, the investor class has realized the value of real estate the financial security it brings along. The rise in NRIs or global Indians investing back in the home country has grown even in the pandemic is further expected to continue, said Rohit Poddar.