Budget Pick: PNB Housing Finance to deliver bumper returns ahead of Budget 2022, says Anil Singhvi; Managing Editor lists 3 reasons for his optimism

In a special edition of Budget Pick, Zee Business Managing Editor Anil Singhvi recommended PNB Housing Finance for bumper returns ahead of Budget 2022. He listed out three reason on why it could be a top by for investors. Attractive valuations, perfect acquisition candidate and Narendra Modi Government’s flagship scheme of Housing For All makes it a high value pick.

While listing positives for the sector, the Managing Editor states that if government wants to keep economic strong than housing sector should be in focus, besides, any announcement to realty will have strong impact on housing sector stocks. He also said that it is a vert attractively priced stock. He also said that it is one of the best times for housing finance companies and real estate sector. It is also a perfect candidate for  takeover, he further said.  

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The company has over  three decade experience in this sector and has a strong pan India presence in 64 cities with 94 branches, Research Analyst Ashish Chaturvedi said in his report. Investors must focus on this stock as we move closer to the Union Budget 2022 announcement on 1 February. The Central and certain state governments have been stressing on the sector, he said citing example of Maharashtra Government, which waived stamp duty that led to a significant increase in pre-bookings.

The government is expected to make big announcements for real estate sector and the housing sector could have a direct impact. If this happens, PNB Housing will be a big beneficiary.

Another important aspect is its financial. The company has strong operating performance and with disbursements accounting for 96 per cent in the retail segment in Q2. Similarly, assets under management is also strong and holds good growth opportunity going forward, he further said. 

The stock is attractive in terms of its valuations and is available at a PE multiple 10x and price to book value is below 1 times. 

Moreover, Foreign Institutional Investors (FIIs) have constantly increased their confidence in the company as per the latest shareholding pattern. The FIIs hold around 26 per cent as per the recent filing compared to around 22 per cent in March 2020.