Sell Reality Stocks and HDFC

Investchips expressed its negative views on reality sector for sometime. But we thought that DLF might be a exception to that. But events unfolded in last couple of weeks reinforced our earlier negative view on reality sector. Next two years would be a very very difficult and painful period for all the reality companies including DLF. DLF may survive this difficult period. But it may not be same company as it used to be. Slowly the price would climb down to less than Rs.100. Sell on rallies.

Another company we strongly negative is HDFC. In our opinion they are cheating their existing customers. Without customer’s satisfaction, no company can survive  for long term. While selling loans to customers, they made the customers to believe that whenever RBI decrease the key interest rates, they also decrease their RPLR (  Retail Prime Lending Rate) and vice versa. They increased their RPLR as soon as RBI hiked the rates. Now RBI decreased key rates with couple of points many occasions,   but HDFC decreased only 0.5% to the existing customers. The reasons they put forth was their RPLR is tied with their cost of funds. Their own senior management  stated in a press release that the cost of funds are drastically reduced and they are passing the benefit to NEW customers ( 3% decrease for NEW customers where as only 0.5% reduction for OLD customers). It is grossly unfair. INVESTCHIPs again advice NEW home loan seekers to avoid private sector housing finance companies like HDFC, ICICI. Go for private sector banks to seek new home loans. Existing customers having outstanding amount of more than Rs.5 lakhs would save huge amount of money if they change their loan A/c to PSU banks.    HDFC slowly would bleed and naturally die or seek merger with HDFC bank. It’s board can consider resigning their posts and leave it to more efficient people. It’s chairman has received lots of awards like Business Man of the year etc. If any award was given based on ethical grounds or social causes, it should be re-called. SELL HDFC.

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