Rural Electrification Corporation- why so low

P/E 2.95
P/BV 0.56
B/V 251.73
ROE 23%
CMP 166.2
NPM 26%
Adjusted EPS growth (3 years cagr) 23%
sales growth of +15%
why is it so undervalued? is there anything i have over looked?

is it good to invest in it now?

 

Since it is PSU it trades at discount to peers because market perceives (and rightly so) that PSEs are not run as professionally as private companies. Also since it is into financing of electricity and power projects there is a higher risk of loans turning to NPAs because of the nature of the sector and political uncertainty. If you want to invest into REC consider PFC which has a similar profile but with a better asset quality and more diversified business model.