Cautious on power sector: Vivek Mavani

Vivek Mavani, vice president-Institutional Equities, Brics Securities, shares his thoughts on power sector.

ET Now: Your thoughts on power firms? Of course, post the FSA with Coal India and the government directive on it, some of the stocks are really flying high but from an investment purpose, which stock looks most beneficiary to you?

Vivek Mavani: I would stay away from the power companies at this point of time. Purely from being cautious, not that I am negative about it.

Just a very sharp run up that they have had more so in the last 2 days post announcement by the PMO. By the way, the PMO’s announcement is still a proposal. It is not a policy as yet and Coal India has not yet signed any FSAs.

There are too many grey areas with that whole thing in terms of pricing, in terms of how is Coal India going to actually deliver all that.

So the stocks have run up far in advance of the actual fundamental developments and the fact that they have run up sharply, I would, just by that virtue, be cautious and wait for events to pan out.