Prefer Power Finance, Rural Electrification: PN Vijay

One can prefer Power Finance Corporation (PFC) and Rural Electrification Corporation (REC), says PN Vijay, Portfolio Manager.

Vijay told CNBC-TV18, "I would not venture out into those companies where just on news and macro flow because the balance sheets are much stretched. If one wants to translate government action in infrastructure into stock picking, I would go for the Power Finance Corporation (PFC), Rural Electrification Corporation (REC). I think there, there is very little political controversy, most of the electricity boards have already taken steps to increase tariffs etc and that is very doable. Here the benefits for PFC and REC are huge. The market has already recognized it."
He further added, "They are very safe plays even by absolute standards if you see the NPA levels, the cost of funding, the NIM levels, all the levels that we normally use are excellent. So I would go a bit cautiously on playing reform related stocks now. Playing FDI in retail is one thing but playing something that government will build more roads and will put long-term funding and so buy a company with debt equity of 3.2 or something is rather risky. So the present government opening up domestic liberalization, I would go for PFC and REC."