Aviod real estate stocks: Agarwal

Rajesh Agarwal, Head of Research, Eastern Financiers Limited is of the view that one should avoid real estate stocks.

Agarwal told CNBC-TV18, “I would suggest not to hold any of the stocks in the real estate pack as such for the time horizon of six months or a year. They are not of investment category as such at this point of time.”
He further added, “Maybe flipping here and there for Rs 2-3 trading opportunities is good but not for investment. For example, if we talk about Indiabulls Real Estate, most of the projects are in Chennai, NCR and Mumbai region. Although the debt levels are lower when compared to other peer companies in the same sector, the problems with the realty stocks of corporate governance, high debt, liquidity tightening, high interest cost, these things are always there and not to forget the high construction cost, which is there.”
”So, I think there is nothing to give the investors in these kind of stocks, it is better to stay away because when they fall, they fall like anything. So it is better to stay away from these kind of stocks. If you want to stay invested in for a six months time horizon, there are a lot of others stocks available in the market maybe in the public sector undertaking (PSU) banking space, you can find very good bets.”