Exit Muthoot Finance, says Rajesh Agarwal

Rajesh Agarwal, Head of Research at Eastern Financiers Limited told CNBC-TV18, "Muthoot Finance has seen an uptake in the recent past just because of gold prices going up, but the business model still remains dicey. I would not suggest anybody to hold this stock for a longer term horizon, maybe a trading stock giving trading opportunities, but fundamentally there is nothing to stay in this stock."

He further added, "On valuation parameter it is trading at a PE of around 6. We get a lot of PSU banks which are trading at a PE of less than 4-5, so it is better to switch from Muthoot Finance to some PSU banking stocks like Andhra Bank, Dena Bank, Syndicate Bank which are trading at a valuation which is much lower than Muthoot Finance. They give good dividends and even business model if one compares banking stocks with Muthoot Finance - it is far better. I would suggest a switch from Muthoot Finance to some of the PSU banks."