>Housing Finance in India (ANTIQUE)

Plenty of ‘room’!

■ Huge untapped, under-penetrated housing market offers significant growth opportunities to providers of housing finance.

■ Default rates of Indian mortgages have been at very low levels. This is due to the fact that most mortgage loan borrowers are ‘first time’ borrowers who borrow money for their basic dwelling units. Low default rates attracted competition from banks. Banks also have the advantage of low-cost deposits.

■ Housing Development Finance Corporation (HDFC) and LIC Housing Finance (LIC HF) are the two largest Housing Finance Companies (HFCs) operating in India. Together, they have a market share close to 40%.

■ We are positive on the housing finance sector, as it carries a high growth potential due to the huge demand-supply gap.

■ We recommend a strong BUY on LIC Housing Finance Ltd, as the improved fundamentals of the company do not get reflected in the valuation of the share price! Buy with a target price of INR450!

To see full report: HOUSING FINANCE