PSU stocks to buy: The key benchmark indices of the Indian stock market have been on an uptrend for the last eight sessions. The Nifty 50 index has risen from 24,579 to 25,114, recording a 2.17% rise in the previous eight sessions. In this slow but steady rise, the 50-stock index broke above the 200-DEMA hurdle placed at 24,800 and regained the psychological 25,000 levels. While regaining this crucial level, Dalal Street also witnessed strong buzz in the state-owned PSU stocks. The Nifty PSE index finished 0.71% higher on Friday, while the Nifty PSU Bank Index bounced back strongly from the day’s lows. Leading PSU stocks Bharat Electronics Ltd (BEL), Hindustan Aeronautics Ltd (HAL), NHPC, Rail Vikas Nigam Limited (RVNL), Oil India Ltd (OIL), etc., finished higher on the weekend session.
According to stock market experts, PSU stock investors are drawing impetus from significant infrastructure spending in India. They said the Government of India (GoI) is seriously enhancing the state-owned company’s CAPEX, especially infra and defence PSUs, which is expected to boost PSU stocks like RVNL, HAL, BEL, etc. They suggested investors look at PSU stocks as these shares are available at discounted prices after strong recent corrections.
Why you should buy PSU stocks?
Pointing towards the abundance of discounted value picks available in the PSU segment, Santosh Meena, Head of Research at Swastika Investmart, said, “After a strong bull run, many PSU stocks have undergone a meaningful correction, making their valuations more attractive. Earlier, there was concern that the government’s focus might shift from capex to consumption. However, in a recent interview, the Finance Minister reaffirmed the government’s commitment to driving growth in manufacturing and infrastructure. In addition, the market is anticipating that discussions around privatisation could soon resume. As a result, these companies are increasingly being viewed as more efficient, financially stronger, and strategically well-positioned to benefit from the government’s long-term economic agenda.”
GoI’s infra, CAPEX expansion push
On triggers that may fuel PSU stocks, Vishnu Kant Upadhyay, AVP of Research & Advisory at Master Capital Services, said, “Drawing impetus from large infrastructure spending works in India, at the very moment when the government is eager to enhance growth and domestic manufacturing capabilities. With its new thrust, capital expenditure is receiving higher allocations so that the budget money streams into railways, roads, and defence sectors, where PSUs have pride of place. Indeed, the defence sector must advance self-reliance and indigenous capabilities in thrust areas.”
PSU stocks to buy
On value picks available in the PSU segment, Vishnu Kant Upadhyay of Master Capital Services said, “Big players like HAL and BEL are already witnessing sizable new order books for boosting the long-term growth of the Indian defence manufacturing base. On the other hand, infrastructure PSUs such as RVNL benefit greatly from a strong execution pipeline emanating from railway modernisation and capacity enhancement projects. At the same time, investors must remain mindful of risks such as execution delays, stretched working capital, and the capital-heavy nature of these projects, alongside the fact that defence valuations have already rerated sharply after an extended rally.”
The Master Capital Services expert said investors would be better served by adopting a selective and staggered approach, looking beyond the short-term rally.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
