Public Sector stocks on struggling trail with low cost valuation amid good financial gains

The Shares of public sector companies have had strong reflectance among retail investors over the past two years, yet recently facing a sharp encashment with uneven valuations, sluggish earnings, and delays in order executions. Major Oil Public Companies have marginally overcome huge losses with impacting comeback rebound like Oil India, Indian Oil, and HPCL. Power sector PSUs are still struggling for recovery.

Amongst 64 stocks, 19 stocks of non-banking have plunged between 40% and 55% from their yearly highs, while another 28 have declined by 30% to 40%.

Overall, 64 state-owned corporates have lost nearly Rs 8 lakh crore in market capitalisation since August 1, the day the BSE PSU index hit an all-time high. Shares of Defense and Shipbuilding PSUs are striving at dilemma for even stability with continuous ups and downs.

Several Stocks like MTNL, Cochin Shipyard, Garden Reach, Shipping Corporation of India, HUDCO, MMTC, KIOCL, Engineers India, MOIL, Bharat Immunologics, MSTC, and Bharat Dynamics have all fallen between 40% and 55% from their 52-week highs.

PSU stocks had witnessed a significant re-rating over the past two years due to an improved outlook, with a strong focus on boosting domestic manufacturing and reducing import dependency. Sectors such as electronics, railways, defense, pharmaceuticals, and chemicals were major beneficiaries of increased government spending.