Invest in PSUs: LIC, HAL
Stocks to purchase today: Prime Minister Narendra Modi poked fun at the opposition parties during the discussion over a no-confidence vote in the parliament, who criticized his administration for not managing the PSU corporations properly.
Despite brief criticism of his government’s PSU policies, PM Modi said that PSUs are producing strong financial results and fiercely competing with their peers. PM Modi went one step further and claimed that the Life Insurance Corporation (LIC) of India has been outpacing the opposition parties despite the fictitious odds they have been putting out, while Hindustan Aeronautics has announced its highest-ever revenue.
Modi stated in jest to the opposition parties that stock market investors might in the near future take a cue from the Indian opposition. In a more upbeat tone, he counseled stock market investors to purchase PSU stocks that the opposition would criticize in the future.
Stock market experts think it’s time to stockpile PSU equities, notably the banking and power stocks because they are anticipated to outperform other segments in the medium to long term, despite the PM’s recommendation to acquire PSU stocks in a more upbeat tone in parliament.
They said that in recent years, highly qualified individuals have been employed to revamp PSU businesses’ management. This aided PSUs in increasing CAPEX while lowering provisioning and NPA. This has aided businesses like HAL and LIC in providing outstanding figures, and it is anticipated that this trend will continue.
They claimed, however, that PSU bank shares are still offered at tempting prices, and one might look at those PSU equities to buy at the present time.
The Indian economy is seeing a paradigm change in per capita income, and when such things happen in any country, its stock market enters an uber-bull trend, according to Sandeep Pandey, a former deputy vice president at HDFC Bank. Returning to the Indian stock market, PSU equities will play a significant part in the Dalal Street ultra-bull trend.
The management of PSU enterprises has almost completely been revamped by the Indian government, which has given state-owned businesses special attention by employing qualified managers and other specialists.
The management of PSU companies is currently attempting to compete with their contemporaries in the private sector. Consider Indian PSU banks as an illustration. By merging the banks, the Indian government reduced its CASA without significantly altering its business model. Today, thanks to a change in how they approached their business model, the State Bank of India (SBI) has made more profit than Reliance Industries Ltd.
Stock picks for today
Saurabh Jain, Vice President of Research at SMC Global Securities, commented on stocks to buy in the PSU sector, saying, “While selecting bank PSU stocks, one needs to look at the CASA of the banks as net interest margins of the Indian banks have peaked out and now it’s CASA that is going to play a key role. As a result, it is anticipated that big banks in the PSU sector, such as SBI, Bank of Baroda, and Canara Bank, will continue to draw in customers because their cost of lending is lower than that of other small banks.
One can choose power sector stocks in the PSU segments, according to Saurabh Jain of SMC Global Securities, since they are available at appealing prices and the demand for power is anticipated to increase by at least double digits.
He was speaking about a theme other than banking that is anticipated to work in the PSU segment. He suggested looking into PSU power companies like NTPC, NHPC, Power Grid Corporation, Satluj Jal Vidyut Nigam, or SJVN for positional investors