Nifty PSU Bank outperformed Nifty Bank Index in the last 1 year; here’s a performance analysis

14 June 2023
3 mins read
by Angel One
The Nifty PSU Banks have delivered a remarkable return of more than 65% in the last year, almost double the returns generated by both the Bank Nifty Index and the Nifty Private Bank Index.
Nifty PSU Bank outperformed Nifty Bank Index in the last 1 year; here’s a performance analysis

The Nifty PSU Bank Index refers to a stock market index that tracks the performance of public sector banks in India. It includes the top public sector banks listed on the NSE. The index provides a measure of the overall performance and trends in the public sector banking sector in the Indian stock market. Investors and analysts often use the Nifty PSU Bank Index as a benchmark to assess the performance of public sector banks in comparison to other banking indices, such as the Bank Nifty Index or the Nifty Private Bank Index.

The index consists of 12 Public sector banks including State Bank of India, Bank of Baroda, Punjab National Bank, Canara Bank, Bank of India, and so on.

On June 14, 2023, the Nifty PSU Bank Index opened at 4075.75, 12.8 points up from the previous closing of 4062.95, and touched a high of 4082.20 and eventually, it closed at 4064.30. Its 52-week highs and Lows are 4617.40 and 2283.85 respectively while its all-time high is around 5375 currently the index is trading below 32% from its all-time high whereas both Nifty Bank and Nifty Pvt Bank index is trading at its all-time high.

The Nifty PSU Bank Index began the day at 4075.75, showing a modest increase of 12.8 points compared to its previous closing of 4062.95. Throughout the trading session, it reached a peak of 4082.20 before ultimately closing at 4064.30. The index’s 52-week range is between 4617.40 (high) and 2283.85 (low), while its all-time high stands at 5375. Presently, the index is trading at a level below 32% of its all-time high. In contrast, both the Nifty Bank and Nifty Pvt Bank indices are currently trading at their respective all-time highs. 

Let’s compare the return of all three Indices

Indices 1 Month 3 Months 6 Months 1 Year
Nifty PSU Bank 1.0% 11.3% -6.3% 65.0%
Nifty PVT Bank 0.8% 13.7% 2.3% 33.6%
Nifty Bank -0.3% 12.6% 2.0% 32.3%

By analyzing the aforementioned data, it becomes clear that the Nifty PSU Bank has outperformed both the Nifty Bank Index and the Nifty Pvt Bank Index over the past year, achieving an impressive return of 65% which is almost twice the return generated by both indices.

Below is the chart presentation comparing both PSU Bank Index and Nifty Bank Index, Blue colour belongs to the PSU Bank Index and Orange is for Nifty Bank Index.

PSU Banks performance:

Company Name CMP (Rs) M Cap (Rs in Cr) Price to Book Value (Times) 1-Year Return % Nifty PSU Bank Index  1-Year Return % 3-Year Return %
Indian Bank       281.8         35,090.3 0.7x 85.5 % 65.0 % 416.1 %
State Bank of India       576.6     5,14,548.5 1.7x 28.6 % 65.0 % 221.6 %
Canara Bank       304.5         55,231.2 0.7x 54.4 % 65.0 % 193.5 %
Bank of Maharashtra           28.5         19,168.5 1.2x 75.4 % 65.0 % 170.9 %
Union Bank of India           72.0         49,210.2 0.7x 101.5 % 65.0 % 152.6 %
Indian Overseas Bank           24.5         46,311.0 2.0x 47.5 % 65.0 % 139.8 %
Bank of Baroda       187.5         96,937.2 0.9x 86.4 % 65.0 % 120.3 %
UCO Bank           26.6         31,743.0 1.2x 142.5 % 65.0 % 106.5 %
Punjab and Sind Bank           31.8         21,526.2 1.5x 123.6 % 65.0 % 92.8 %
Bank of India           74.2         30,444.3 0.5x 67.5 % 65.0 % 81.8 %
Central Bank of India           27.1         23,473.3 0.8x 59.1 % 65.0 % 67.6 %
Punjab National Bank           51.8         57,037.1 0.6x 73.9 % 65.0 % 56.4 %

Referring to the provided data, it can be observed that among the twelve stocks listed, eight of them have beaten the return of the Nifty PSU Bank index in the last one year. Additionally, within a span of three years, eight stocks have achieved an outstanding return of over 100%.

Indian Bank has emerged as a top performer with a remarkable multi-bagger return of 416% during the last three-year. Meanwhile, the PSU Bank Giant, State Bank of India, has generated a substantial return of 221% over the same duration. There is a huge potential on all PSU banks to outperform in the near future. Investors must keep these stocks on their radar.