The public sector part of the BSE PSU index have posted the highest ever profit with 48 per cent surge in net profit at ₹5.07 lakh crore in the financial year ended March 31, 2024 against ₹3.43 lakh crore in FY’23.

The revenue of 56 PSUs zoomed multi-fold to ₹53 lakh crore and PSUs paid total taxes of ₹1.68 lakh crore in FY24, according to ACE Equity.

The BSE PSU index itself has rallied 79 per cent to 18,275 points in March against 10,185 points logged in April, 2023. The index has gained further 12 per cent so far this fiscal to close at 20,491 on Monday.

Some of 53 companies, which are part of the BSE PSU index, have sort of a monopoly in their respective businesses. SBI registered the highest profit of ₹68,138 crore last fiscal and the stock jumped 30 per cent to ₹752 as of March-end against ₹578 in April, 2023. The stock has moved up further by 9 per cent on Monday to ₹906 on Monday.

Most of PSU companies will benefit from the expected boom in Indian economy and policies aimed towards import substitution and export promotion.

Manish Chowdhury, Head of Research, StoxBox said with the ruling government expected to make a comeback the PSU companies should benefit from continuation of predictable policy and decision making besides benefiting from increased capex and reforms in sectors closely related to economic growth.

In the last few years, he said, PSU stocks have proved their mettle by focusing on operational efficiencies, improving the execution track record, professional management, and strategising on future growth potential.

Robust outlook

“With a relatively low float of shares and robust growth outlook, we sense opportunities across the broad spectrum of PSUs including power, energy, banking, railways, defence and manufacturing,” he added.

Shrey Jain, Founder and CEO SAS Online - India’s Deep Discount Broker said PSU companies have presence in key sectors such as power, capital goods, defence, energy and financial services which tend to do well when the economy is on an upswing.

The communication from various government agencies is amply clear that the focus on the PSUs will continue and they are expected to post higher earnings in this fiscal, he added.

Jain said a stronger mandate to the government can also propel disinvestment programme this year and potential disinvestment candidates in shipping, material handling and allied activities can also be bought.