 "HDFC extends rally, jumps 5%; stock surges 15% in three days")
Shares of Housing Development Finance Corporation (HDFC) were trading higher for the third straight day, up 5.5 per cent to Rs 1,808.50 on the BSE on Wednesday as investors indulged in some value buying after the price erosion during the coronavirus-induced sell-off.
The stock of the country's largest private sector mortgage company has rallied 15 per cent in the past three trading days, as compared to 3.5 per cent rise in the S&P BSE Sensex. Prior to that, in four trading days, it had underperformed the market and fell 9 per cent, against 1 per cent decline in the benchmark index.
According to Kotak Institutional Equities, the asset quality in housing is likely to hold up well, although slippages from self-employed affordable housing segment will likely increase.
As per rating agency CRISIL, the largest segment of home loans will be less affected on asset quality because more than two-thirds of the borrowers are salaried and collections are through auto-debit instructions.
In contrast, affordable housing loans could witness increase in delinquencies over the medium term because of higher proportion of self-employed borrowers. However, the strong moral obligation linked to residential property will help keep overall asset quality in control, it said.
Analysts at Emkay Global Financial Services expect HDFC’s loan growth to remain healthy at around 13 per cent backed by strong demand in the affordable segment and lack of competition.
“Trend in sanctions in the affordable housing segment will continue to be crucial for future growth trends. Consolidated profit after tax may remain under pressure due to Covid-19 provision and the mark-to-market of RBL’s stake. Management commentary on net interest margins (NIMs), market share and retail portfolio will be key monitorables,” the brokerage firm said in March quarter preview.
The stock of the country's largest private sector mortgage company has rallied 15 per cent in the past three trading days, as compared to 3.5 per cent rise in the S&P BSE Sensex. Prior to that, in four trading days, it had underperformed the market and fell 9 per cent, against 1 per cent decline in the benchmark index.
According to Kotak Institutional Equities, the asset quality in housing is likely to hold up well, although slippages from self-employed affordable housing segment will likely increase.
As per rating agency CRISIL, the largest segment of home loans will be less affected on asset quality because more than two-thirds of the borrowers are salaried and collections are through auto-debit instructions.
In contrast, affordable housing loans could witness increase in delinquencies over the medium term because of higher proportion of self-employed borrowers. However, the strong moral obligation linked to residential property will help keep overall asset quality in control, it said.
Analysts at Emkay Global Financial Services expect HDFC’s loan growth to remain healthy at around 13 per cent backed by strong demand in the affordable segment and lack of competition.
“Trend in sanctions in the affordable housing segment will continue to be crucial for future growth trends. Consolidated profit after tax may remain under pressure due to Covid-19 provision and the mark-to-market of RBL’s stake. Management commentary on net interest margins (NIMs), market share and retail portfolio will be key monitorables,” the brokerage firm said in March quarter preview.
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