Shares of Central Public Sector Enterprises (CPSE) have been outperforming benchmark indices in the past 1 year. The Nifty CPSE index has jumped 63 percent in the last 1 year as against a 20 percent rise in benchmark Nifty. Even in 2022 year-to-date (YTD), the Nifty CPSE index has added around 23 percent versus a 0.2 percent fall in Nifty.
Among stocks, two of 12 stocks in the Nifty CPSE index have turned multibaggers in the last 1 year, giving over 100 percent returns.
Oil India surged around 107 percent in this period. The stock rose around 26 percent in 2022 YTD on the back of the surge in oil prices amid the Russia-Ukraine crisis. The firm is expected to witness strong earnings on higher oil prices. Oil prices saw a sharp increase amid concern over supply disruption due to the geopolitical conflict in Europe in the quarter that ended March 2022 (Q4FY22).
Meanwhile, Bharat Electronics also climbed 102 percent in the last 1 year. In 2022 YTD, the stock has risen around 23 percent. Recently the firm announced that it has achieved a turnover of about ₹15,000 crore (provisional and unaudited), during the Financial Year 2021-22, against the previous year’s turnover of ₹13,818 crore, despite challenges posed by the Covid-19 pandemic and global semiconductor challenges.
CPSE stocks NLC India, ONGC, Coal India, NTPC and NHPC also jumped over 50 percent each in the last 1 year while PowerGrid, NMDC, SJVN added 17-48 percent in this period. However, Cochin shipyard and NBCC India were the only two stocks that gave negative returns in this period.
Demand for power had spiked driving the share price of NTPC and PowerGrid. "Considering the power demand outstripping the supply, domestic coal scarcity and Russia-Ukraine conflict getting stretched, we believe these higher energy prices will be sustained in the near term," analysts at Choice broking said. This will also add to the coal demand in India making this positive for Coal India as well.
Going ahead experts believe the volatility in the market to continue in the near term. However, defence, energy, and power are themes that are likely to be in trend due to the ongoing geopolitical tensions and the heatwaves, which have already started in April.