Best PSU stocks in India in 2023: Bulls in Public Sector

Just about a month back, Prime Minister Narendra Modi while addressing the Lok Sabha gave a piece of advice about investing in the best PSU stocks in India. He mentioned that these government-run companies are performing impressively and holding their own against competitors. The Prime Minister also highlighted that “some political parties used to spread false rumors about these companies, but in reality, they’ve grown stronger and more successful”.

One company that faced negative comments was HAL. There were claims that it was struggling and causing problems in India’s defense sector. The Prime Minister shared a tip for those interested in the stock market: “Here’s a gurumantra for those keeping an eye on the stock markets: consider investing in the PSUs that face criticism from the opposition, and you might see good returns”.

Over the last month, PSU stocks have increased significantly as a result of this witty suggestion that was provided during a session in the Lok Sabha in August. Even while the Prime Minister’s remarks weren’t quite a formal financial proposal, many investors were undoubtedly interested in them.
Since then, certain PSU stocks have experienced a noticeable increase. It’s noteworthy that this increase isn’t specific to any one demographic or sector. Several PSUs have seen a considerable increase in interest.

In the last month alone, the share prices of around 80 percent of the 55 PSU equities included in the BSE PSU and BSE PSU Bank indices increased by anywhere from 10 to an astonishing 75 percent. The crux of our discussion lies in identifying the top-performing PSU stocks in India. We’ll talk about various PSU stocks and their fundamentals. Without further ado, let’s embark on this exploration!

What is a PSU?

Recent Trends in Growth of PSUs in Indian Market

Surge in State-Run Companies’ Market Value Reflects Growing Confidence”

Best PSU stocks in India
Image Courtesy: CNBC- TV18

Best PSU stocks in India

The Best PSU Stocks in India are: SBI, HAL, ONGC, NTPC, BPCL, SAIL, Power Grid Corporation of India Limited, Coal India Limited, GAIL (India), National Aluminium Company Limited (NALCO), Bharat Electronics Limited (BEL), Container Corporation of India Limited (CONCOR), Bharat Heavy Electricals Limited (BHEL), Indian Oil Corporation (IOC), NMDC.

Facts about some of the Best PSU stocks in India

State Bank of India

52 Week High (15-Dec-2022): 629.55| 52 Week Low (01-Feb-2023): 499.35

Hindustan Aeronautics Ltd

52 Week High (11-Sep-2023): 4,170.00 | 52 Week Low (28-Sep-2022): 2,241.05

Coal India Ltd

52 Week High (20-Sep-2023): 288.00 | 52 Week Low (27-Mar-2023): 207.60

GAIL (India) Ltd

52 Week High (11-Sep-2023): 129.55 | 52 Week Low (26-Sep-2022): 83.00

Over the last five years, GAIL (India) Ltd. displayed varying performance in profits. The Compound Annual Growth Rate (CAGR) for this period resulted in a modest 3% increase. However, in the preceding three years, there was a slight decline with a steady -16% growth. In the most recent trailing twelve months (TTM), there was a substantial decrease of -69%, indicating a challenging period for the company in terms of profit margins.

In sales, the company experienced consistent growth, with a CAGR of 22% over the past five years. The preceding three years also saw robust growth at 26%. However, in the most recent TTM, there was a commendable growth rate of 24%.

Turning to stock performance, GAIL (India) Ltd. showed a fluctuating trend. The CAGR in stock price was -1% over the last five years. However, there was a notable surge to 26% in the most recent three-year period, followed by a rise to 36% in the trailing twelve months.

In terms of Return on Equity (ROE), GAIL (India) Ltd.’s performance has been notable. Over the last five years, it averaged at 15%. In the preceding three years, there was an improvement, standing at 14%. In the trailing twelve months, it remained stable at 9%.

Bharat Petroleum Corporation Ltd

52 Week High (07-Jul-2023): 397.90 | 52 Week Low (20-Oct-2022): 288.05

Facts to Consider while looking for the Best PSU stocks in India

When considering the best PSU stocks in India, focus on these three crucial factors:

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Financial Resilience: It’s crucial to favor companies with a solid financial history. This comprises a steady increase in income, a profit margin that is healthy, and debt that is under control.

Government Policies and Rules: Stay updated on government policies and regulations that directly impact the sectors in which these PSUs operate. Positive shifts in policy can serve as a strong growth catalyst, while adverse policies may have the opposite effect.

Industry and Market Insights: Look at the bigger economic picture to see how it affects the potential growth of this sector. Keep an eye on what’s happening in the market, who the competitors are, and the overall trends.

BOTTOM LINE

In the dynamic world of PSU stocks, it’s like picking stars in the night sky – each one shines uniquely. Remember, financial decisions are like crafting your own story. So, trust your instincts, stay curious, and keep exploring. Who knows, the next big star might just be waiting for you to spot it. Happy Reading!

Disclaimer

The blog is meant for informational purposes and serves the general analysis of the stocks. Contents provided here are based on careful research and analysis utilizing the fundamental and technical indicators over a period of time. The post does not consist any direct recommendation about Investing or trading in the securities market. Thorough research and careful consideration are necessary for individuals to fulfill their personal responsibility in making financial decisions. Seeking professional advice before making any financial decisions is always advisable.

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