PFC is much cheaper than IREDA (I have both). Mr Market has gone bonkers about the PSU stock. Of course they were undervalued, but an apple to apple comparison shows that the market is now assigning too high a value to the PSU stocks.
If one has to choose between a govt management and a Tata managed company, which way should the choice lie? And if on cold calculation too the PSU stock appears overpriced?
The PSU shares are going thru some harmonal turmoil.
Markets keep teaching us. Momentum chasing needs very good brakes.
To me it seems that what initially started as value hunting, changed to momentum car chase. They seem to have become high-risk game now.
Hiren ved is CIO of Alchemy capital. Very interesting stock market analysis from 2003 onwards
Some 14 PSU stocks has risen more than 200 per cent in the one year (As per Value research data quoted by Zeebiz) while as many as 40 of them have turned Multibaggers with at least a 100 per cent rise. The main reason behind this rise is the central government’s high focus on PSUs. They are getting orders in abundance, their business is increasing, overall financial performance.is improving leading to rise in share price.
I guess no matter the market condition, at the end of the day the only criteria to select a stock will be its valuation, right?
As someone pointed out there are some psu companies which still offer attractive valuations and a few others where the valuation has still not run up to crazy high numbers.
Everything else is a risk reward game we play with ourselves?
Market conditions do matter. If there is a shortage of fund with institutions, even great companies will trade at a discount, and can do so for a long time.
As market expects policy continuity with Modi3, in my view all capex related themes such as PLI - manufacturing/ Atma Nirbhar Bharat, Railway , Defence , infrastructure, Green Hydrogen, Renewable energy / Solar / Wind / Electrolyser Ethanol / Biogas, PSU banks are likely to do well during next 5 years.
There was an opportunity during last 2 days - though there was a bit of political uncertainty… Had added in to few of the themes yesterday. However , there may still be
pockets of undervaluation in PSU stocks which one can explore…
Discl : Not a buy or sell recommendation. I remain fully invested in PSU’s pack under above mentioned themes from lower level since last 2 years which I still hold. I may be biased. please do your own assessment before investing in PSU stocks.
The PNGRB (Petroleum and Natural Gas Regulatory Board) withdrew its September 2021 notice that declared the term-end of marketing exclusivity in different geographical areas.
The Regulatory pressures could, over time, lead to industry consolidation. This would be done by pushing smaller CGD players who are unable to meet their expansion targets to exit, thereby creating potential acquisition opportunities for the larger players.
Discl: Invested . May be biased. please do your own assessment before investing.
Edited on 25 June , 2024
