asant Maheshwari is famous for his unflinching bullishness for housing finance stocks.
His theory is that the unending demand for housing by the ever-burgeoning population of the Country augers well for these stocks. He has also pointed out that housing finance enjoy high repayments and low NPAs because borrowers are loath to default and lose the roof over their heads.
“A blind buy in this situation would be non-banking finance companies – NBFCs specifically relating to the housing finance sector. You can buy them, buy them 5 percent lower, 5 percent up from here, keep them for 5-10 years. The two which I own, are from western India and southern India,” Basant said.
Basant recommended Repco Home Finance as his “best buy for 2014”. The stock has done well and delivered gains of nearly 125% since then
Basant gave a detailed explanation
in support of his theory that demonetization and the crack down on
black money will benefit organized players in the housing finance
sector.
“I am super bullish on housing finance …. they are growing at more than 30 percent. When home prices go down, what happens is you defer your purchase. You say maybe you will get it cheaper later on, so, you defer your purchase. So, to that extent, for a quarter or two quarters, there will be postponement of purchases …. So, all of that demand is going to come back in a lumpy nature.
Once the black component goes out, the ability of these guys to fund more would increase because you need more white money. Thirdly, as the unorganised lending and borrowing finishes, the organised financers would have bigger pie to run on. So, for example, if I am buying a house, I will say give me Rs 5 lakh and I will pay you interest every month and I take cash from you and do it; all that business is going to stop, nobody is going to give cash, nobody is going to take cash. So, I think the entire activity would increase. However, the screen discounts all of that. I am not giving you something which is out of the extraordinary. This is very fair knowledge to everybody and screen discounts all that.
Lower home prices increases affordability and lower home prices encourages people to go and buy it. So, I think that is going to come back with a bang. It might take a couple of quarters but afterwards it is all going to come back. So, out of the NBFC which I own and like, nothing has changed. I still own all of them — the NBFC space, the sector that I am talking about, housing finance is top on the list.
Housing finance companies are growing at more than 30 percent. I think anybody can go and just do the math. Not the 18-20 percent, not the 25 percent, the ones which are growing at more than 30 percent, I think they should do very well.
His theory is that the unending demand for housing by the ever-burgeoning population of the Country augers well for these stocks. He has also pointed out that housing finance enjoy high repayments and low NPAs because borrowers are loath to default and lose the roof over their heads.
“A blind buy in this situation would be non-banking finance companies – NBFCs specifically relating to the housing finance sector. You can buy them, buy them 5 percent lower, 5 percent up from here, keep them for 5-10 years. The two which I own, are from western India and southern India,” Basant said.
Basant recommended Repco Home Finance as his “best buy for 2014”. The stock has done well and delivered gains of nearly 125% since then
“I am super bullish on housing finance …. they are growing at more than 30 percent. When home prices go down, what happens is you defer your purchase. You say maybe you will get it cheaper later on, so, you defer your purchase. So, to that extent, for a quarter or two quarters, there will be postponement of purchases …. So, all of that demand is going to come back in a lumpy nature.
Once the black component goes out, the ability of these guys to fund more would increase because you need more white money. Thirdly, as the unorganised lending and borrowing finishes, the organised financers would have bigger pie to run on. So, for example, if I am buying a house, I will say give me Rs 5 lakh and I will pay you interest every month and I take cash from you and do it; all that business is going to stop, nobody is going to give cash, nobody is going to take cash. So, I think the entire activity would increase. However, the screen discounts all of that. I am not giving you something which is out of the extraordinary. This is very fair knowledge to everybody and screen discounts all that.
Lower home prices increases affordability and lower home prices encourages people to go and buy it. So, I think that is going to come back with a bang. It might take a couple of quarters but afterwards it is all going to come back. So, out of the NBFC which I own and like, nothing has changed. I still own all of them — the NBFC space, the sector that I am talking about, housing finance is top on the list.
Housing finance companies are growing at more than 30 percent. I think anybody can go and just do the math. Not the 18-20 percent, not the 25 percent, the ones which are growing at more than 30 percent, I think they should do very well.
Disclaimer
Disclaimer : All information given here is for information purpose only. Users are advised to rely on their own judgement or investment advisor when making investment decisions. This blog is not liable and take no responsibility for any loss or profit arising out of such decisions being made by anyone acting on such advice.
No comments:
Post a Comment