PSU Stocks Enjoy Their Moment Of Glory

After a phase of lacklustre performance under dark grey clouds, Indian public sector enterprises are now enjoying prime space in the sunshine, turning out to be smart bets in the Indian market. Primarily, this amazing turnaround has taken place due to the government's focus on infrastructure development in order to propel the nation towards the status of an economic powerhouse and also the revolutionary decisions taken by the managements of the PSUs. The article details the PSUs to understand their current status

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The past few years have proven to be exceptionally favourable for public sector companies (PSUs). Since 2021, there has been a remarkable turnaround for battered PSU names. This is after Prime Minister Narendra Modi himself batted for the PSUs. The government's emphasis on infrastructure capex, defence indigenisation and the 'Make in India' initiative in manufacturing has led to such a change in the landscape. This renewed focus has led to a re-rating of PSUs as a whole, driven by promising future prospects.

The performance of PSU companies has been nothing short of impressive, both financially and in terms of stock prices. Notably, every PSU company has delivered positive returns during this period, with even the lowest return exceeding 15 per cent. For instance, the shares of Indian Railway Finance Corporation have surged by over 400 per cent in the past year alone, from approximately Rs 28 to Rs 193 before settling at Rs 144.1 presently. This translates to a remarkable growth of Rs 1 lakh investment becoming Rs 4.14 lakhs today.

Similar success stories can be seen across various PSU companies, with Housing and Urban Development Corporation witnessing a staggering 3.41 times increase in its share price over the past year. Moreover, PSU banks have also witnessed substantial gains, with eight out of 12 government-owned banks doubling investor wealth in the last year. PNB emerged as the top gainer, with its stock rallying by 176 per cent, followed closely by Indian Overseas Bank with over 172 per cent growth. Even State Bank of India (SBI), the largest lender in India, saw a respectable increase of 41 per cent in its stock price over the same period, outperforming many private counterparts.