Indian state-owned companies have emerged as the surprising champions of the stock market in FY24, outperforming mid-and small-cap stocks with a remarkable surge in their stock prices. Despite facing pressure earlier, PSU stocks have seen an unprecedented rise, with the BSE PSU index doubling in value.
The government’s increased capital expenditure, sector-specific reasons, and the anticipation of political stability post the Lok Sabha elections have all contributed to the stellar performance of PSU stocks. The limited liquidity in these stocks, combined with strong order acquisitions and improved profitability in sectors like banking and railways, has further fueled their growth.
In FY24, PSU banks have witnessed a significant improvement in profits, with expectations of higher dividend payouts. The railway sector has also performed exceptionally well, along with the power and defence sectors, benefiting from increased budget allocations and order wins.
Oil PSUs have also seen impressive gains, with stable fuel prices contributing to their success. Out of the 56 stocks listed in the BSE PSU index, 37 have delivered multibagger returns, with IRFC leading the pack with a return of 458%.
Overall, the phenomenal performance of Indian state-owned companies in FY24 has caught the attention of investors and experts alike, showcasing the potential for significant returns in the market. Investors are advised to consult with experts before making any investment decisions.
