The veteran investor saw solid value in PSUs and was extremely bullish on the sector and performance of select stocks from the pocket suggest that his prophecy turned out to be true in 2022 so far.
According to the data from Ace Equity, about a dozen state-run companies have delivered between 50-170 per cent return in the current calendar year, with at least four turning multibaggers as of September 19.
However, this performance has been concentrated to select pockets. Only stocks related to petroleum refinery, coal mining, defence and banking stocks have been able to outperform.
The list is topped by
, the subsidiary of , which has rallied 170 per cent in 2022 so far.
It is followed by Bharat Dynamics (up 138 per cent up),
(up 105 per cent up) and (up 104 per cent), which have been able to deliver multibagger returns.
, and have also gained between 60 to 75 per cent in 2022 so far.
Bharat Electronics, Garden Reach Shipbuilders and Engineers,
, Fertilizers and Chemicals and have gained 50 per cent or more during the period under review.
However, market analysts remain mixed on PSU stocks as they believe that only select stocks from a few sectors have outperformed but majority of the state run company’s performance remain dud.
Amnish Aggarwal, Head of Research, Prabhudas Lilladher said one should not paint the entire picture with one brush as only selected stocks have outperformed from the PSU basket.
“Following the Afghanistan crisis and Russia-Ukraine war, there is a renewed interest in developing domestic defence capabilities,” he said “The government’s thrust is on in-house production of the defence equipment, which lead to the re-rating of these stocks and are likely to outperform in the coming days.”
Select state-owned banks have also delivered decent returns due to their undervaluation of the stocks, Aggarwal added, who suggested looking at PSU counters in a stock-specific manner.
Market analysts suggest that PSUs which cater a particular niche market and are leaders in their segment have emerged on the top of the charts, thanks to their compelling valuations.
Kranthi Bathini, Equity strategist at WealthMills Securities said that the outperformance of select PSUs has come after a prolonged underperformance and only a few of them have been able to get their mojo back.
Bathini, who is selectively positive on PSU stocks, said that strategic disinvestment plans will be the trump card for the re-rating of these stocks in times to come. “The worst is over for the majority of the PSBs and can deliver strong results in the coming quarter,” he added.
However, select PSUs from the underperforming sectors like metal, financials and telecom have disappointed the investors in 2022. The stocks have wiped out up to 60 per cent of investors’ wealth in 2022.
, , , SAIL, NBCC (India), MTNL, IFCI, The , Hindustan Fluorocarbons, Bharat Immunologicals and are down between 26-57 per cent on a YTD basis.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)