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Top-performing PSU stocks to invest in India in 2024

stock market
07 Mar 20246 mins readBy MOFSL

Introduction:

Public Sector Undertakings (PSUs) have long been considered as stable investment options in the Indian stock market, offering investors a balance of growth and security. These government-owned entities play a crucial role in pivotal sectors such as steel, oil, and banking, spurring employment and competitiveness. In this blog, you will explore what PSUs are and find the list of top PSUs in India for investment in 2024.

What are PSUs?

Public Sector Undertakings (PSUs) refer to companies which are majorly held by the Government. These companies aim to spur economic growth in various sectors such as finance, energy, and infrastructure. PSUs are further classified as Central Public Sector Undertakings (CPSUs), State Public Sector Undertakings (SPSUs), and Public Sector Banks (PSBs).

Top PSU stocks to invest in 2024

In 2023, several listed PSUs witnessed a remarkable surge, propelled by heightened government capital expenditure in sectors like railways and defence with a strong emphasis on 'Make in India.' This concerted effort led to a significant surge in PSU stocks, contributing to a market capitalisation increase of nearly Rs. 20 lakh crores.

Come 2024, these stocks still offer fair opportunities for investors to invest with a long-term horizon and gain high returns. It’s crucial to identify such stocks and invest in them at the earliest. Below are a few options you can consider:

1. Coal India Limited

Coal India Limited (CIL) continues to be a major player in the energy sector, providing a significant portion of India's coal requirements. With the increasing focus on renewable energy, CIL has also ventured into clean energy projects, showcasing adaptability to changing market trends. Furthermore, CIL has charted a roadmap envisioning a coal production of 1 billion tonnes by 2024-25, aligning with the nation's growing demand for coal. As of 23 February 2024, CIL shares were trading for Rs. 443.90 per share at the National Stock Exchange (NSE) and Rs. 443.80 per share at the Bombay Stock Exchange (BSE) at market closing.

2. Steel Authority of India Limited (SAIL)

SAIL is a leading player in the steel industry, contributing significantly to India's infrastructure development. With the government's push for the manufacturing sector, SAIL stands to benefit from increased demand for steel. As of 23 February, SAIL’s shares were trading for Rs. 128.00 per share at the NSE and Rs. 128.05 per share at the BSE. The one-year return of these shares stood at 49.97%.

3. National Thermal Power Corporation (NTPC)

NTPC is the largest player in India’s power generation sector, with a diverse portfolio that includes coal, gas, and renewable energy. As the demand for clean energy solutions rises, NTPC's focus on renewable power projects makes it an attractive investment option. As of 23 February 2024, NTPC’s shares were trading for Rs. 337.75 per share at the NSE and Rs. 337.70 per share at the BSE. The one-year return of these shares stood at 98.76%.

4. Oil and Natural Gas Corporation (ONGC)

ONGC is a key player in the Indian oil and gas industry. It has a strong foothold in both oil exploration and production. With the demand for global energy rising, ONGC stands to benefit, and its consistent dividends make it an attractive choice for long-term investors. However, the company faces significant risks due to fluctuations in global crude oil prices, directly impacting its profitability. As of 23 February 2024, ONGC stocks were available for Rs. 272.20 per share at the NSE and Rs. 272 per share at the BSE.

5. State Bank of India (SBI)

SBI is a systematically important bank that holds a dominant position in the Indian financial sector. It is the largest public bank in India in terms of business and asset size. In the last two years, the bank’s Non-Performing Assets (NPAs) have reduced considerably, making it an attractive investment option in 2024. However, you must remember that PSU banks are impacted majorly in the case of the Reserve Bank of India’s (RBI’s) policy changes. 

To conclude

Investing in PSU stocks can be a prudent strategy for investors seeking a blend of stability and potential growth. However, it's crucial to conduct thorough research, considering factors such as the economic environment, government policies, and global market trends. Diversification and a long-term investment perspective are key to fetching maximum gains from stock market investments. 

 

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Disclaimer: The stocks, companies, or financial instruments mentioned in this blog are for informational purposes only and should not be considered as investment recommendations. It is advised to consult with your financial advisor before making any investment decisions. Investment in securities markets are subject to market risks, read all the related documents carefully before investing. Investors are strongly encouraged to carefully read the risk disclosure documents prior to participating in market-related investments or trading activities. Due to the volatile nature of financial markets, no guarantees can be made regarding investment returns. Motilal Oswal Financial Services Ltd. does not offer any assured returns on market-linked securities. Please note that past performance of stocks or indices is not indicative of future results.
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