Public Sector Enterprises (PSEs) are Roaring - Stars seem to be aligning for them 🦁

YTD Returns

Factors contributing to their rise

Record Demand and Production

  • Production and demand for sectors like coal and power are near all time highs and with global shortages being seen in energy sector, In the short run, this augers well for these companies.

Most of the Sectors get benefited by higher Inflation

  • Most of the PSEs are either into producing or generating real assets (energy) like coal, power and other commodities. When there is higher inflation, these companies tend to make higher profits than usual.

  • In case of scenarios such as supply shortage or demand surge due to extreme scenarios like war and other geopolitical tensions, these companies tend to be benefited in most of the cases.

Act as a safety net during High Interest rate Scenario.

  • These value stocks (mostly due to the govt promoter factor) which tend to be relatively cheap offer a good safety net during high interest rate scenarios due to the lack of risk appetite to invest in risky high growth assets which are interest rate sensitive.

Receiving Dividends and Participating in Share Buybacks is kind of Cool

  • PSEs give huge dividends to their shareholders which is great source of passive income .

  • PSEs also buyback some of their stock.

  • Both the above steps are beneficial to the shareholders.

Trend of Privatisation is well and truly on

  • Considering the huge assets and untapped resources that these PSEs have, The scope for share price appreciation remains high when these co’s are privatised. Co.s like BEML, Concor, BPCL etc are already in the pipeline for this.

Technicals - Ready for a 14 year breakout ?

  • Chart of Nifty PSE and also many of its constituents are on the verge of a breakout after giving negative returns for 14 years .

My View

Let’s see how it goes. I’m fairly bullish on this space as a whole and I’m expecting massive outperformance for the coming 2-3 years.

All points valid.

I had initially invested in PSE including PSU banks. What I noticed over the years, is that investment in private companies gives better returns than the PSE and PSU banks. I watched it for years and took a call to clean up my portfolio of all Government owned companies (with the exception of SBI). I discovered that Investment in Government owned companies is a wealth disrupter vs investing in other private companies. At the same time, I am passively invested in one or two Government Companies via Nifty 50 and Nifty next 50 ETF (Ongc, IOC and few others).

Disc: These are my personal views. As the author has mentioned there are various valid points in investing in PSE. However when you compare like to like, PSE vs its counterpart which is owned by private promoters, PSE is a wealth destroyer

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Coal India up 66% Year to Date @ 258 ++ now . Add to that, dividends worth almost 20 rs

Arguably, the stock of the year

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Still holding a bunch of PSUs in my holdings. I did churn them out a couple of months back and have now started systematically adding them back into PF on red days! :smiley:

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Too good as always :wink: Frenzy in these stocks may begin once the sector breaches the 5000 mark… currently near 4300

5000 would make it an ATH in history. :grimacing: :grimacing: :grimacing: :rofl: :rofl: Also, break out of a decade.

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Yeah…Maybe bit more consolidation left before the big breakout

HAL doing super well.

Not part of the PSE index but a very good defense-related company. BDL is at a very good zone.

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First sector to hit new highs despite market weakness - Nifty PSE

Sector hitting 15 year highs. If breakout sustains, should easily do 20-30% from here

All the PSEs are breaking out big time. Nifty PSE at 5525

Nifty PSE index did 7800 highs and is now near 7400 … some cooling down is now necessary.

This was the sector of the year

My friend @jashjacob must’ve made a killing :fire::heart_eyes:

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This was the peak PSU bull market. Single day profit, stock was just in T1. Sold off everything at 384.5 yesterday. :rofl: :rofl:

Nifty PSE 9313 :scream:

One feels it’s now at the climax zone and eventually should consolidate between 8000-10k for some months or a year before next trigger

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