PSU stocks have surged significantly in the past year, exemplified by the Nifty PSU index almost doubling and the Nifty PSU Bank index climbing over 80%. Various factors such as attractive valuations, improving fundamentals, government support, and investor sentiment have propelled these stocks to new highs.
Over time, the government has prioritized unlocking the value within PSU stocks through strategies like disinvestment, consolidation, governance reforms, and fostering strategic growth in key sectors. Consequently, PSU stocks have experienced a re-rating in recent years.
Bloomberg data reveals that the Nifty PSE Index is presently trading at 13.4 times its one-year forward earnings, significantly surpassing its five-year average of 8.3x. Since January 2024, the index for state-owned stocks has surged by as much as 38%, while the benchmark Nifty 50 has seen a comparatively modest rise of close to 6% over the same period.
Here are four PSU stocks that have doubled in 2024 year-to-date.
Rail Vikas Nigam Ltd
Rail Vikas Nigam Ltd was Incorporated in 2003 by the Govt. of India, it is engaged in the business of implementing various types of rail infrastructure projects such as gauge conversion, new lines, railway electrification, and bridges.
Rail Vikas Nigam Ltd is a large-cap company with a market value of Rs 79,689 crore.The company shares were trading at Rs 382 per share, up 1.72% from the previous close price on the national stock exchange.
Over the past five months, the stock has surged, delivering remarkable returns of approximately 103%. Starting at Rs 182 in January 2024, it has climbed to its current price level. This suggests that an investor who had put Rs 10,000 into the stock at the beginning of the year would now see it grow to around Rs 20,300.
Rail Vikas Nigam boasts an impressive order book of Rs. 85,000 crores, with Rs. 40,000 crores attributed to bids and Rs. 45,000 crores to nominations. Looking ahead to FY 2025, the company targets revenue of Rs. 23,000 crores and anticipates closing the year with an order book ranging from Rs. 92,000 crores to Rs. 1 lakh crore. Additionally, it aims to secure orders worth Rs. 20,000 crores to Rs. 25,000 crore during the fiscal year.
As of the March quarter, the Government of India possesses a 72.84% stake in the company, while retail investors hold a 18.66% stake.
Housing & Urban Development Corporation Ltd
HUDCO is a housing finance company under the Ministry of Housing and Urban Affairs (MoHUA) and is engaged in the business of financing housing and urban development activities in India.
Over the past five months, starting from January 2024 when it was priced at Rs 129, the stock has surged by an impressive 105%, demonstrating significant potential for investors. For instance, had an investor allocated Rs 10,000 to this stock at the beginning of the year, it would now be valued at around Rs 20,500.
Housing & Urban Development Corporation Ltd is a large-cap company with a market value of Rs 53,431 crore.The company shares were trading at Rs 267 per share,up 1.68% from the previous close price on the national stock exchange.
As of FY24, the Company’s loan book amounts to Rs. 92,654 Crore, while its net worth stands at Rs. 16,614.30 Crore. Additionally, there has been an improvement in asset quality, with net credit impaired assets at 0.36%, compared to 0.52% as of March 31, 2023.
As of the March quarter, the Government of India possesses a 75% stake in the company, while retail investors hold a 11.70% stake.
Cochin Shipyard Ltd
Cochin Shipyard Ltd (CSL) is the largest shipbuilding and maintenance facility in India,It is the market leader in the construction of all types of vessels, repairs, and ships, with competence in the shipbuilding and ship repairing industries.
Over the past five months, from January 2024’s starting value of Rs 681 to the current price, the stock has yielded impressive returns, marking a growth of approximately 181 percent. This suggests that an investor who allocated Rs 10,000 to this stock at the beginning of the year would now see their investment grow to around Rs 28,100.
Cochin Shipyard Ltd is a large-cap company with a market value of Rs 52,112 crore.The company shares were trading at Rs 1,981 per share,down 1.80% from the previous close price on the national stock exchange.
The company manufactures a range of warships and a few notable ones are the INS Vikrant, the Maharshi Parashuram, and the Clipper.
In Q3 FY24, Cochin Shipyard boasted a total order book of Rs 21,500 crores, with the defense segment accounting for orders worth Rs 16,064 crores.
As of the March quarter, the Government of India possesses a 72.86% stake in the company, while retail investors hold a 19.47% stake.
IFCI Ltd
IFCI, previously known as Industrial Finance Corporation of India, is an Indian Government owned non banking finance company established to cater to the long-term finance needs of the industrial sector.
IFCI Ltd is a small-cap company with a market value of Rs 15,501 crore.The company shares were trading at Rs 590.3 per share, up 0.53 % from the previous close price on the national stock exchange.
Over the past five months, the stock has seen remarkable growth, delivering a staggering return of approximately 103%, starting from Rs 29 in January 2024 to its current price level. This implies that an investor who had invested Rs 10,000 in the stock at the beginning of the year would now have around Rs 20,300, showcasing significant gains.
As of the March quarter, the Government of India possesses a 71.72 % stake in the company, while retail investors hold a 20.33% stake.
Written by Omkar Chitnis
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