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Frenzy in PSU Stocks: Are PSU stocks trading near their 52-week high PE? Know more here!

20 September 20233 mins read by Angel One
Public Sector Undertakings (PSUs) stocks in India have gained prominence due to the government's increased expectations for PSUs regarding capital expenditure and dividend payments.
Frenzy in PSU Stocks: Are PSU stocks trading near their 52-week high PE? Know more here!
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Public Sector Undertakings (PSUs) stocks in India have gained prominence due to the government’s increased expectations for PSUs regarding capital expenditure and dividend payments. In a light-hearted remark last month, Prime Minister Narendra Modi suggested that stock market investors consider investing in PSUs, even those previously criticized by the Opposition. He humorously quipped, “Here’s a guru mantra for those who follow the stock markets: Place your bets in those PSUs which they (the Opposition) abuse. Your money will surely grow.”

The Prime Minister’s playful advice, delivered in the Lok Sabha, has sparked an uptrend in PSU stocks. Over the past month, certain PSUs have attracted the attention of investors, leading to a surge in their stock prices. This surge reflects growing investor confidence in PSU stocks, driven by the government’s heightened focus on their performance, which includes increased capital expenditure and dividends.

Here are some of the PSU stocks which are trading near their 52-week High PE:

Stocks PE (x) 52-week High PE (x)
Indian Railway Finance Corporation Ltd 16.2 16.2
Indian Overseas Bank 37.4 37.4
UCO Bank 26.8 29.4
Central Bank of India 22.4 22.4
MMTC 28.7 33.4
SJVN 30.9 30.9
Bank of India 9.13 13.1
Rail Vikas Nigam Ltd 23.2 27
Mazagon Dock Shipbuilders Ltd 39.7 40.1
State Bank of India 7.98 13.6

In recent trading sessions, certain railway-related stocks, specifically Indian Railway Finance Corporation (IRFC), IRCON International, and Rail Vikas Nigam Ltd (RVNL), have shown an upward trend. Over the past few sessions, IRFC’s stock price has surged by more than 50 percent, while RVNL’s stock price has seen a substantial increase of over 25 percent.

The recent government spending patterns have reignited interest in PSU stocks. While the positive momentum in PSU stocks may persist, it is important to note that there is a possibility that these stocks might be trading at inflated valuations.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions

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