Public Sector Undertakings (PSU) or Central Public Sector Enterprises (CPSE) in India are government-owned enterprises in which 51 percent or more share capital is held by the Government of India or state/central governments.
Here are the 3 multi-bagger Public Sector Enterprises with a return on equity(ROE) of up to 63.33 percent
REC
REC Limited is a ‘Maharatna’ company under the administrative control of the Ministry of Power, GOI, it provides long-term loans and other financing products to the State, Centre, and Private Companies for the creation of infrastructure assets in the country.
In the day’s trade on December 15, 2023, the shares of REC Limited closed at Rs. 434.10, down 1.81 percent from its previous close price of Rs. 442.10 and its market capitalization is Rs. 1,13,663 Crores. It has delivered multi-bagger returns of 291 percent in a year.
The company’s revenue from operations grew 0.53 percent from Rs. 39,269.05 Crores in FY22 to Rs. 39,478.26 Crores in FY23, accompanied by increasing profits of Rs. 10,035.69 Crores to Rs. 11,166.98 Crores.
It has reported a return on equity (ROE) of 20.62 percent and a return on capital employed (ROCE) of 9.14 percent, it is making good returns on its equity and capital employed. It has reported a net profit margin of 28.29 percent and a Net Interest margin of 3.45 percent. The company’s ROCE is less as it has a debt-to-equity ratio of 6.60 as it is a financing company.
The company’s sector-wise breakup of disbursements in Q2FY24 is as follows, Power Distribution 57 percent, Power Generation 14 percent, Renewables 10 percent, Infrastructure & Logistics-Electrical and Mechanical 7 percent, Transmission 5 percent, STL/MTL 4 percent and Infrastructure & Logistics-Core 3 percent.
Hindustan Aeronautics Limited
Hindustan Aeronautics Limited (HAL) is the Indian government’s prime manufacturer of defense machinery in the Aeronautic segment. The Company designs, develops, manufactures, maintains, and upgrades aircraft, helicopters, and critical aerospace components & accessories.
In the day’s trade on December 15, 2023, the shares of Hindustan Aeronautics Limited closed at Rs. 2,762, down 0.40 percent from its previous close price of Rs. 2,773 and its market capitalization is Rs. 1,84,675 Crores. It has delivered multi-bagger returns of 114 percent in a year.
The company’s revenue from operations grew 9.37 percent from Rs. 24,620.02 Crores in FY22 to Rs. 26,927.46 Crores in FY23, accompanied by increasing profits of Rs. 5,080.04 Crores to Rs. 5,827.74 Crores.
It has reported a return on equity (ROE) of 27.18 percent and a return on capital employed (ROCE) of 30.59 percent, it is making good returns on its equity and capital employed.
As of May 2023, HAL has an order book of Rs. 81,784 Crores which consists of manufacturing contracts, repair & overhaul, spares, design & development projects, and exports.
HAL has 154 Patents, 115 Industrial Designs, 447 Copyrights, and 2 Trademarks as of 2023 and a capex of Rs. 2,081 Crores in FY23, The investments were mainly towards the Green Field Helicopter project at Tumakuru, augmentation of facilities of LCA, ROH of SU-30, ROH of AL-31 FP Engine, etc.
Fertilizers and chemicals Travancore
Fertilisers & Chemicals Travancore is a chemicals and fertilizers manufacturer, its main products include Ammonia, Sulphuric acid, Ammonium Phosphate – sulfate, Ammonium sulfate, etc and some of the major by-products are Gypsum, Nitric acid, soda ash, etc
In the day’s trade on December 15, 2023, the shares of Fertilizers and Chemicals Travancore Limited closed at Rs. 802, up 2.94 percent from its previous close price of Rs. 779.10 and its market capitalization is Rs. 51,818 Crores. It has delivered multi-bagger returns of 199 percent in a year.
The company’s revenue from operations grew by 40.08 percent from Rs. 4,424.8 Crores in FY22 to Rs. 6,198.15 Crores in FY23, accompanied by increasing profits of Rs. 346.38 Crores to Rs. 612.99 Crores.
It has reported a return on equity (ROE) of 63.33 percent and a return on capital employed (ROCE) of 37.61 percent, it is making good returns on its equity and capital employed. It has a net profit margin of 9.89 percent.
The company’s capex plans are going in full swing with some of the projects completed such as the New ammonia barge, Pearl of Periyar, New sulphuric acid tank at CD, and Reconstruction of South Coal Berth.
Written by: Bharath K.S
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