Housing Finance companies are having the time of their lives. Know why

Shares of LIC Housing Finance Ltd. were in heavy demand even a day of its stellar earnings on the back of several upgrades by brokerages.

BoFA ML raised its price target on the non-banking finance company to `590 vs `565 as a margin expansion of 22 bps in the first quarter earnings helped the stock hit a new orbit. In a note to clients, BoFA said LIC HF's moves to lower its borrowing costs by way of funding through bonds rather than banks was a major step towards higher margins.

LIC Housing continues to see good growth in its higher-margins Loans Against Property segment, the report added.

Futures of LIC Housing surged 4.2 percent, or 20 rupees, to 484 rupees. They were among the list of top gainers on the derivatives space, showing a long build up of positions. Open Interest was up 5.7 percent on the Futures.

Shares of LIC Housing Finance have surged 57 percent in the past one year, pushing the market capitalisation to 24,200 crore rupees.

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