PSU stocks expected for sharp rebound amid current low trading sessions

Global brokerages and analysts are proclaiming a sharp rebound for Public sector units as the government’s stance towards value maximization and advertising the firms to upgrade as above as possible is making the anticipations more active and affirmative. The recent flow of discharge seen in some of the stocks is making the possibility more reliable, where top picks are SBI, Coal India Ltd, NTPC, BPCL, etc.

The PSU index has performed nicely at Nifty by 40 points in FY23 and another more advanced 15 points basis are accumulated in 2024 which initiated the PSU spectrum to rally above estimations presumed. The accelerated capex amount incentivized by the government has been a major boost along with growing investing capabilities.

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The PSU index valuations suggest that PSU Banks, power/ coal utilities, and selected oil and infra companies have multiplied approximately twice or thrice throughout 2006-12 and integrated on the same level for the recent fiscal year. Meanwhile, the quarterly reports of some Public sector are remarkable.

 

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The PSU Bank index is up 78% year-on-year, surpassing the private lenders by 70 points while oil PSUs have seen a sharp rise in stock prices after the third quarter of FY24. The disinvestment policy has been also actively seeking robust output growth and at the same time combination of dividends provided by public sectors along with stake sales and asset monetization. The allocation to these power PSUs has been increased by 175 to Rs 93,200 crore in the interim budget, acting as a sufficient boon for the units.

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