REC, PFC, Rail Vikas Nigam among 14 PSU stocks that rallied between 100% and 250% in CY23

Out of the 55 constituents of the BSE PSU index, an impressive 53 have achieved double-digit returns in CY23, with power-related companies leading the way. 

Rural Electrification Corporation (REC) topped the list with a remarkable 250% return in CY23, marking its most substantial yearly gain since 2009. In today’s trade, the stock touched a new all-time high of ₹412 apiece. The stock closed positively in 10 out of the last 11 months, showcasing its robust performance.

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Notably, July spearheaded the monthly gains with a remarkable rally of 23.26%, closely followed by September with a gain of 20.43%. 

The surge in power stocks was attributed to a robust increase in power demand amid a surge in economic activities, benefiting power sector financing companies and supply chain companies.

In September, the power demand touched a new record high of 243.27 GW, fueled by industrial activities due to the effect of the festive rush. 

Meanwhile, Power Finance Corporation, a Maharatna CPSE and the country’s leading non-bank financial corporation, also saw its shares gain phenomenally. Starting the year at ₹113.95 apiece, the company’s shares skyrocketed by 245%, reaching the current level of ₹389.55 apiece.

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Railway PSUs also experienced substantial returns, fueled by significant order wins resulting from the ongoing transformation within the railway sector. During Union Budget 2023-2024, the government announced a capital outlay of ₹2.40 lakh crore for the Indian Railways, the highest ever outlay and about 9 times the outlay made in 2013-14.

Shares of Ircon International jumped 173% this year so far, reaching ₹163.35 apiece. On December 04, the stock touched an all-time high of ₹180 apiece. Likewise, Rail Vikas Nigam shares grew by 161.17% this year and they also recorded a new all-time high of ₹199.25 apiece on September 12. 

Indian Railway Finance Corporation (IRFC) emerged as another top performer in the BSE PSU index, boasting a remarkable return of 153%.

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The defence sector also witnessed substantial gains, driven by increased budget allocations, strong order wins, and the government’s emphasis on boosting domestic procurement while reducing dependence on defence imports.

Mazagon Dock Shipbuilders, one of the country’s leading defence PSUs, saw its shares deliver a return of 165.28% in CY23, spiking from ₹798 apiece to ₹2,117. In today’s trade, the stock jumped nearly 3% after the company received an order from Oil and Natural Gas Corporation Limited (ONGC) worth ₹1,145.10 crore.

Maintaining its upward trajectory, Cochin Shipyard recorded a robust 140% rally this year so far, with a notable monthly gain of 26.62% in November, marking its most substantial monthly increase since its listing in 2017.

Furthermore, the renewable energy sector has witnessed a significant upswing, propelled by India’s ambitious goals for transitioning to sustainable energy sources, targeting 500 GW of non-fossil-based electricity capacity by 2030.

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Shares of SJVN experienced an impressive 162% rally in CY23, primarily attributed to robust order wins. Monarch Networth Capital, a domestic brokerage firm, initiated coverage on the stock with a ‘buy’ rating, establishing a target price of ₹125. This target reflects a substantial upside of 39.45% from the stock’s previous closing price of ₹89.65 apiece.

Several other stocks in the BSE PSU index, including ITI, BHEL, MRPL, NLC India, NBCC (India), and Engineers India, have also delivered noteworthy returns ranging between 103% and 127% during the current year.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Published: 11 Dec 2023, 06:21 PM IST