Best PSU Stocks in India 2024

Investing in PSU (Public Sector Undertaking) stocks is more than a safe bet; it’s a smart move to capitalise on India’s robust public sector. As India continues to fuel its economic engine, PSUs emerge as pillars of stability and consistent returns.

These stocks have been on a phenomenal run, exceeding the benchmark Nifty. They are experiencing remarkable growth, with some soaring over 100% in one year and others skyrocketing by 300-400%. But what’s driving this massive surge?

The answer lies in the blend of favourable factors, which we will explore in this blog. So, are you ready to delve into the best PSU stocks for 2024 and break down their performances? Let’s get started!

The Role of Public Sector Undertakings (PSUs) in India: A Brief Overview

PSUs are the backbone of India’s economy, driving critical sectors like infrastructure, banking, energy, mining, etc. As of 2024, this sector is on a remarkable upward trajectory, reclaiming 17.3% of India’s market glory. Several key factors drive this revival:

  • Strategic Investments: PSUs are making significant investments in infrastructure and industry expansion. This boom in business and economic activity translates to higher stock valuations.

  • Government Initiatives: Programs like Atmanirbhar Bharat and Make in India are gaining traction. These policies aim to foster indigenous manufacturing, self-reliance, and economic growth.

These positive trends signal a golden opportunity to invest in the best PSU stocks. But with so many choices, how do you find investment opportunities with significant growth potential? Read on to learn more!

Public Sector Powerhouses: Leading PSU Stocks List for 2024

With ongoing advancements in the PSU sector, an informed investment in these stocks will guarantee significant profits. Here is a quick overview of the 5 best PSU stocks you should keep an eye on:

Stock Name

Market Cap (₹ Cr)

Dividend Yield (%)

Net Profit (₹ Cr)

ROE (%)

ROCE (%)

Book Value (₹)

P/E Ratio

Piotroski Score

High/Low (₹)

Debt to Equity

Power Grid Corporation

294,736

5.92

15,499

19.6

13.1

93.4

18.52

8

319/172

1.52

Coal India

289,463

5.4

8,682

45.2

65.1

134

7.74

6

488/223

0.08

SBI

732,711

1.67

21,384

20.1

6.68

402

10.2

7

840/543

1.54

ONGC

351,180

4.03

9,536

18.4

23.63

223

9.19

8

293/150

0.46

GAIL

137,289

2.63

2,469

14.0

14.6

117

13.9

7

214/103

0.24

Note: This PSU stocks list is for informational purposes only. We are not SEBI registered and do not endorse any company or pressure you to buy stocks. Please conduct your research or consult a financial advisor before investing.

1. Power Grid Corporation of India Ltd (PGCIL)

PGCIL is India’s largest electric power transmission firm and a Maharatna CPSU. In December 2023, PGCIL reported a total revenue of ₹11,550 crore, indicating a positive trend in sales performance.

With a robust market cap, this PSU stock offers a high dividend yield, making it a favourite among investors. Its considerable net profit and efficient capital usage reflect its solid performance and potential for future growth.

2. Coal India Ltd. (CIL)

This largest coal-producing company supplies almost 40% of India’s commercial energy. Coal India has a near-monopoly status in the mining industry and aims to produce 1 billion tonnes of coal by 2024-25. 

The firm offers high dividend payouts, making it a top pick for income-focused investors. The company’s low debt-to-equity ratio underscores its financial health and stability. In fact, for Q4 FY24, CIL reported a 26% YoY growth in net profit, reaching Rs 8,682 crore. 

3. State Bank of India (SBI)

This financial institution is one of India’s largest public sector banks and is critical in the country’s economic landscape. In the fourth quarter of the financial year 2014, SBI reported revenue of ₹1,64,914 crore and a net profit of ₹21,384 crore

These notable increases are driven by strong lending growth and improved asset quality. SBI’s solid financials ensure its place among the best PSU bank stocks.

4. Oil & Natural Gas Corporation (ONGC)

ONGC is India’s largest crude oil and natural gas company, contributing around 71% to domestic production. In the previous quarter, ONGC’s total revenue was ₹165,569 crore, a decrease from ₹146,874 crore in September 2023. 

But, compared to December 2022, total revenue increased by ₹18,695 crore, and net profit rose by ₹1,145 crore. Despite these fluctuations, ONGC remains a leading player, with impressive net profits and a high return on equity (ROE).

5. GAIL (India) Limited

GAIL, a leader in the natural gas sector, boasts a robust balance sheet with low debt levels and consistent net profit growth. With a dividend payout ratio of 43.8%, this PSU stock attracts long-term investors. 

The fourth quarter of FY24 saw a massive 289% rise in net profit at ₹2,468.71 crore. GAIL’s extensive infrastructure supports India’s transition to cleaner energy, making it an ideal choice for investors seeking growth in this sector.

Factors to Consider Before Investing in the Best PSU Stocks in India

Here are some key factors to consider before investing in these top PSU stocks in India:

Financial Health

Assess the firm’s fiscal statements, including revenue, profit margins, and cash flows. Analysing these metrics lets you gauge a company’s stability and ability to generate long-term returns. 

For example, look for a PSU with solid balance sheets, minimal debt, and uniform earnings growth. A track record of constant profitability is an encouraging sign.

Dividend Yield

One of the attractive features of PSU stocks is their high dividend yields. These payouts also reflect a company’s profitability and commitment to returning value to shareholders. 

For example, invest in companies that share some of their profits with investors. This steady income stream makes these stocks a good choice for income-focused investors.

Market Position

Consider the company’s market position and competitive edge in its industry. Strong market leaders tend to be more resilient during economic downturns. 

For example, a PSU that dominates its sector and has a strategic management team will likely perform well even during challenging times.

Government Policies

Government policies and regulations can influence even the best PSU stocks. Policy changes can either boost or hinder a company’s performance. 

For example, the government’s push for renewable energy positively impacts companies expanding their green energy portfolio.

Industry Trends

Companies that adapt to industry changes are more likely to sustain long-term growth. Understand demand-supply dynamics, tech upgrades, regulatory changes, and other such aspects. 

For example, trends in digital banking and financial technology can impact PSU bank stocks. Assess how these institutions are adapting to these advancements.

Bottom Line

PSU stocks are not just investment instruments. They are the building blocks of India’s journey towards becoming a global powerhouse. When you invest in these companies – you engage in the nation’s development and growth story. But that’s not all; you also gain from their robust performance and significant market presence!

So, why wait? Let your money work for you in the most rewarding way. Choose from our top-performing PSU stocks list today and achieve financial prowess!

FAQs

1. Should I Invest in PSU Stocks?

Yes, PSU stocks can be a promising investment avenue. Here’s why:

  • Backed by government support, these shares offer stability in uncertain markets.
  • Consistent dividend payouts provide regular income for investors.
  • They offer gradual and sustainable growth potential over time.
  • Adding these stocks diversifies portfolios beyond private companies, reducing sector-specific risks. 
  • These stocks have shown strength in volatile markets thanks to conservative management and an essential service focus.

Yet, you should assess individual stock performance and market conditions before investing.

2. What are the Risks of Investing in PSU Stocks?

The main risks are policy changes, economic downturns, and sector-specific challenges. It’s essential to stay informed and diversify your investments.

3. What Makes PSU Stocks Different from Private Sector Stocks?

PSU stocks are government-controlled, often more stable, and offer higher dividend yields. Private sector stocks may offer higher growth potential but come with higher risks.

LenDenClub is India’s largest alternate investment platform which started operations in India in 2015. We have been helping investors diversify their investments beyond traditional investment instruments ever since.


LenDenClub is India’s largest alternate investment platform which started operations in India in 2015. We have been helping lenders diversify their investments beyond traditional investment instruments ever since.

About

Lending

Best Blogs: Best Investment Apps | Best P2P Lending Platforms in India | Best Trading Apps

The Reserve Bank of India does not accept any responsibility for the correctness of any of the statements or representations made or opinions expressed by Innofin Solutions Private Limited, and does not provide any assurance for repayment of the loans lent through its platform.

LenDenClub is an Intermediary under the provisions of the Information Technology Act, 2000 and virtually connects lenders and borrowers through its electronic platform via the website and/or mobile app.

The lending transaction is purely between lenders and borrowers at their own discretion, and LenDenClub does not assure loan fulfilment and/or lending simple interest. Also, the information provided on the platform is verified or checked on the best efforts basis without guaranteeing any accuracy of the data/information verification. Any lending decision taken by a lender on the basis of this information is at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower, fully or partially. The risk is entirely on the lender. LenDenClub will not be responsible for the full or partial loss of the principal and/or interest of lenders’ lending amounts.

*This is an annualized yield and is subject to the maximum FMPP tenure, which is 5 years. P2P lending is subject to high risk and may cause an entire loss of principal.
 

*P2P lending is subject to risks. And lending decisions taken by a lender on the basis of this information are at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower.

** Average value mentioned is the weighted average of simple interest received by lenders

© 2024 LenDenClub by Innofin Solutions Private Limited | CIN: U74999MH2015PTC266499