Sell Rural Electrification Corporation on rally: Agarwal

Rajesh Agarwal, Head of Research, Eastern Financiers Limited is of the view that one should sell Rural Electrification Corporation (REC) on rally.

Agarwal told CNBC-TV18, "I would suggest sell REC on rallies because numbers look pretty bad. The main objective of the company is to promote rural electrification and the entire power sector has its own set of problems and no wonder this company has huge non-performing assets (NPAs)." He further added, "The only positive thing about this company is the dividend yield which it gives of around 3.5 percent even on valuation parameters it is trading at around 6 times. So, although valuations are not that bad, still from NPA side, there are problems in the near future. So it is better to sell on rallies or switch to some other stock. Even if you want to be in the financial space, IDFC or a Power Finance Corporation (PFC) would be a better option."