loader2
Login Open ICICI 3-in-1 Account

Open ICICI
3-in-1 Account

Manage your Savings, Demat and Trading Account conveniently at one place

+91

BLOG

Housing financiers poised for growth amid structural demand and policy tailwinds

ICICIdirect Research 21 Nov 2025 DISCLAIMER

Housing finance companies (HFCs) are well-positioned for growth in H2FY26, leveraging an underpenetrated market where India's mortgage-to-GDP ratio stood at ~16.6% in FY25, far below the 20-30% in emerging markets and 50-60% in developed economies, offering a multi-decade expansion runway.
This structural opportunity is further anticipated to amplify by GST reforms reducing construction costs and enhancing affordability. Long-term drivers, including rising urbanization, nuclear family trends, premiumization in mid-segment, and government schemes like PMAY 2.0 targeting 1 crore, additional affordable units, are expected to propel housing sales.
In Q2FY26 earnings calls, management commentary across companies echoed optimism for H2FY26, guiding AUM growth led by prime salaried and affordable segment, with PNB Housing targeting 17-18% growth amid robust disbursements (up 22% YoY); Canfin Homes at 12-13% with a focus on semi-urban prime borrowers.
While continued intense competitive intensity, amid aggressive stance by PSU banks (which results in higher customer churn via balance transfer), could limit AUM growth, wholesale segment is expected to largely offset anticipated pressure.
Operationally, margins are forecasted to hold steady as rate cut transmit fully, trimming funding costs amid surplus liquidity, securitization volumes and resilient asset quality in prime segment, maintaining RoA/RoE in FY26-27E.
Overall, we favor HFCs with diversified portfolios in prime-lending segment (PNB Housing and Canfin Homes). Apart from HFC, banks including SBI, HDFC Bank also remain beneficiaries, potentially aiding their retail loan mix.

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere