Dipan Mehta, Member at BSE & NSE told CNBC-TV18, "Typically our view on PSU is extremely negative and as far as Coal India is concerned, it is no different. We look for rallies like this to exit out of the stock if anybody is still holding it. Unless we see massive reforms taking place on the PSU side, they will continue to disappoint the market."
"You will have one odd quarter or so doing well but these are not secular growth stories which will give compounding returns to investors. As and when these companies start doing better, the government may look at ways and means of trying to see how they can be used for the better good of the public at large at the expense of the minority shareholders. So, that risk always remains in the PSUs especially someone like Coal India which has a monopoly position and is in a very sensitive sector like coal where there are a lot of push and pulls," he added.
"Oil marketing companies included these are not stocks for investors to have as core holding. You could keep on trading in them depending upon the news flow and whether they are the flavour of the season or not but you cannot be holding huge chunks of these in your portfolio and hope to outperform the market or at least have decent returns on your equity investments," he said.
Disclosure: Analyst's trading strategies, investments and recommendations are more or less inline with the views which he expressed.
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