- Date : 24/12/2021
- Read: 3 mins
Identifying the high-fliers among PSU stocks can help you gain huge profits.
PSUs or Public Sector Undertakings are companies where the Government of India has a majority stake (equal to or more than 51%). These companies are pivotal to the country’s economy as they operate to develop the nation in different ways. However, due to the wave of privatisation, there is uncertainty about these companies. Many investors hesitate to invest in PSUs, thinking they are slow and inefficient and won’t generate high returns.
But exceptions are always there. Check out these 5 best PSU stocks in India where you can invest your money for the medium term and make a significant profit.
Looking at ways to kickstart your investments? Get inspired with helpful reads here.
1. NALCO
NALCO (National Aluminium Company Ltd) is a Navratna CPSE that falls under the Ministry of Mines. It embarked on its journey in 1981. This CPSE group ‘A’ company operates in the mining, metals, and power sector. In the last year, this stock has surged by a whopping 243%. This huge surge is primarily because of the commodity cycle run. Another factor is a slowing down of production by China. The company has a very high Piotroski Score, which is a testimonial to its strong financials. Its current share price is Rs 98.30.
2. Power Grid Corporation of India Ltd
Taking the second spot is Power Grid Corporation of India Ltd., which is a part of the Nifty 50 index as well. It is an important company when it comes to interstate power transmission services. In the past year, the price has increased from Rs 147.15 to Rs 209.85, which is an increase of 42.61%. The dividends are good and investors receive them regularly. The RoCE of the company is also improving as it uses its capital wisely.
Also Read: How To Invest In Stocks Like A Pro
3. Bharat Electronics Limited
This is another exceptional PSU that focuses mainly on manufacturing electronic products for the country’s defence sector. BEL stock is a good choice for long-term investors as the performance of this company has always been steady and on the positive side. In the past year, its share price increased by 76.12%. It is also one of the stocks most recommended by brokers. Another strength is that it’s successfully cleared most of the CANSLIM criteria (an investment system for screening stocks). The current stock price is Rs 202.10.
4. State Bank of India
In fourth place is SBI, which needs no introduction. This stock delivered a whopping 80% return in the past year. The current price level of its stock is Rs 471.90. SBI has strong financials and a booming operating cash flow and net cash flow. This leading Indian bank also has a strong loan book and great asset quality.
Also Read: Top Five Gaming Stocks
5. IRCTC
Indian Railways Catering & Tourism Corporation Ltd. came up with its IPO two years ago. In the meantime, its share price has gone up from Rs 176.34 to its current level of Rs 833.20. This PSU has a definite edge - a monopoly in the market. IRCTC has provided dividends from the starting year of its listing as well.
Many investors look down on PSUs, but as we have seen, there are a few that have delivered sterling returns over the past few years. Moreover, there are many others that may have lower share prices at present but have the potential to flourish.
PSUs or Public Sector Undertakings are companies where the Government of India has a majority stake (equal to or more than 51%). These companies are pivotal to the country’s economy as they operate to develop the nation in different ways. However, due to the wave of privatisation, there is uncertainty about these companies. Many investors hesitate to invest in PSUs, thinking they are slow and inefficient and won’t generate high returns.
But exceptions are always there. Check out these 5 best PSU stocks in India where you can invest your money for the medium term and make a significant profit.
Looking at ways to kickstart your investments? Get inspired with helpful reads here.
1. NALCO
NALCO (National Aluminium Company Ltd) is a Navratna CPSE that falls under the Ministry of Mines. It embarked on its journey in 1981. This CPSE group ‘A’ company operates in the mining, metals, and power sector. In the last year, this stock has surged by a whopping 243%. This huge surge is primarily because of the commodity cycle run. Another factor is a slowing down of production by China. The company has a very high Piotroski Score, which is a testimonial to its strong financials. Its current share price is Rs 98.30.
2. Power Grid Corporation of India Ltd
Taking the second spot is Power Grid Corporation of India Ltd., which is a part of the Nifty 50 index as well. It is an important company when it comes to interstate power transmission services. In the past year, the price has increased from Rs 147.15 to Rs 209.85, which is an increase of 42.61%. The dividends are good and investors receive them regularly. The RoCE of the company is also improving as it uses its capital wisely.
Also Read: How To Invest In Stocks Like A Pro
3. Bharat Electronics Limited
This is another exceptional PSU that focuses mainly on manufacturing electronic products for the country’s defence sector. BEL stock is a good choice for long-term investors as the performance of this company has always been steady and on the positive side. In the past year, its share price increased by 76.12%. It is also one of the stocks most recommended by brokers. Another strength is that it’s successfully cleared most of the CANSLIM criteria (an investment system for screening stocks). The current stock price is Rs 202.10.
4. State Bank of India
In fourth place is SBI, which needs no introduction. This stock delivered a whopping 80% return in the past year. The current price level of its stock is Rs 471.90. SBI has strong financials and a booming operating cash flow and net cash flow. This leading Indian bank also has a strong loan book and great asset quality.
Also Read: Top Five Gaming Stocks
5. IRCTC
Indian Railways Catering & Tourism Corporation Ltd. came up with its IPO two years ago. In the meantime, its share price has gone up from Rs 176.34 to its current level of Rs 833.20. This PSU has a definite edge - a monopoly in the market. IRCTC has provided dividends from the starting year of its listing as well.
Many investors look down on PSUs, but as we have seen, there are a few that have delivered sterling returns over the past few years. Moreover, there are many others that may have lower share prices at present but have the potential to flourish.
