Positive on housing finance stocks: Seshadri Bharathan, MD & CEO, KSEMA Fincon Ltd

Seshadri Bharathan, MD & CEO, KSEMA Fincon Ltd, in a chat with ET Now talks about housing finance stocks.

What about the second rung housing finance stocks? What do you do with them?

I think if you speak to any of the real estate developers, the sense that we are getting from the market is that there is a clear demand for residential properties while commercial properties off take is very slow. But residential demand is very strong especially in the metro cities in India and also with the RBI coming out with circular where the funding cost would come down based on the rating for the various NBFCs.

So all these NBFCs have very good rating. So their cost of funding would come down for this year and as a consequence their earnings per share would improve. I think that’s one of the reasons why we are seeing most of these second rung housing sector stocks getting rerated.

So would you buy them a Gruh Finance or GIC Housing Finance?

Yes.