Evaluation of the Efficiency and Profitability of Housing Finance Companies in India – A Purposive Study

Abstract

One of humanity's basic requirements is housing, and as the population and level of life rise, so does the need for housing; hence, financing the purchase of a home became necessary. The fact that we view homes as the finest investments and wish to spend our savings or hard-earned money to purchase one is a good indicator of the housing sector's importance. In order for the Indian economy to expand and develop, housing is essential. Based on secondary data, the study's primary goal is to use ratio analysis to assess and contrast the stability of home financing businesses' present financial performance with potential future outcomes.The gathered information has been examined in terms of profitability, liquidity, efficiency, and revenues. Specific housing finance institutions emerged as a result of the demand for funding to buy a home. The modern-day Housing Finance Companies, or HFCs, have increased their lending throughout time, helping the housing industry to flourish. In the past, home finance firms outperformed banks for long-term capital sources, concentrated lending, reduced operational expenses, and better customer service, even while banks had somewhat lower loan rates. Over the past five years, leading home finance businesses like HDFC and LIC home Finance have seen a 9.41% increase in loan books, boosting their overall market share by 47.36%. Given these circumstances, the current study makes an effort to assess LIC Housing Finance Limited's and HDFC's operating performance. The 2010–2021 timeframe was chosen for the study. The study comes to the conclusion that HDFC and LICHFL are the top home finance entities in India based on the overall ranking of ratio analysis.