Since the start of 2022, the BSE PSU index has outperformed the BSE Sensex, rising by 11.74% from 8,142 to 9,098 points. While over the same period, the Sensex rose 1.25%. 16 PSU stocks produced double-digit returns over the past year; of those, six stocks saw gains of between 40% and 130%.
Leading the way are stocks related to the Defence sector, with Mazagon Dock shipbuilders leading the index's gains. Shares of MDS have delivered astounding returns to their shareholders by gaining 44% over the course of just one month, rising from Rs.430.45 to Rs.619.60. This defence PSU stock began rising on February 24, the same day the Russia-Ukraine crisis erupted, and it has since returned 173% to its shareholders. Over the last one year, the market price of the stock has increased by nearly 131%.
For FY23, the Mazagon Dock Shipbuilders have an order book worth ₹43,343 crore. In Q1FY23, the company reported a 133.83% year-on-year (YoY) increase in standalone profit after tax (PAT) to ₹217 crore, up from ₹92.8 crore in the same period last year. Further, the company’s EBITDA grew two-fold to ₹173.7 crore in Q1FY23 from ₹70.2 crore in the corresponding quarter of last year.
Another defence PSU stock, Bharat Dynamics, was the very next PSU stock in the list. In the past one year the stock has risen from ₹389 to its current level of ₹889, representing a multi-bagger return of 128.53%.
The stock began its upward journey after it signed a contract worth ₹3,131.82 crore with the Indian army to manufacture and supply Knukura Anti-Tank Guided Missiles, according to media reports. Besides, the government's push for making in India and focus on strengthening the defence sector is also a major boost for domestic players like Bharat Dynamics.
Adding to that, the company's financials have improved in the last three quarters. In the quarter that ended June 2022, Bharat Dynamics clocked a net profit of ₹39.9 crore.
Shares of Hindustan Aeronautics Ltd., a public-sector enterprise with Navaratna status administered by the Indian government's Ministry of Defence, have rallied 105.20% so far in 2022. The defence stock has outperformed the benchmark Nifty50 in the last year, rising 71.98% versus a 4.8% drop in the Nifty50. Further, the stock gained by 110.21% from its 52-week low of ₹1,010.
HAL reported a 205.18% surge in net profit at ₹606.7 crore for the quarter ended June, as against a net profit of ₹198.8 crore in the year-ago period. The company became debt-free for the first time in five years.
With a rally of around 58.48% in the past one year, the Bank of Baroda emerged as the fourth top gainer in the BSE PSU Index. The majority of the stock's gains have occurred since June, when it rose from ₹91.15 to ₹141.50, representing a return of 55%.
For the June-ending quarter, the bank reported a profit after tax (PAT) of ₹2,168 crore on higher growth in net interest income. The asset quality of the lender saw an improvement with the gross non-performing asset (GNPA) ratio improving to 6.26 per cent from 8.86 per cent. The net NPA ratio improved to 1.58 percent as compared to 3.03 percent in the first quarter of the previous fiscal.
Shares of Bharat Electronics increased 29.48% over the last three months to reach a new 52-week high of ₹114.6. BEL is the dominant supplier of radar, communication, and electronic warfare equipment to the Indian armed forces.
Since the beginning of the year, the stock has been moving higher, rising from ₹69.98 levels to ₹105.45, a return of nearly 50 per cent. In the June quarter, BEL delivered robust results above market expectations.
BEL reported a standalone profit after tax (PAT) of ₹431.5 crore, up from ₹11.2 crore in the same period last year. Total revenue increased by nearly 94.48% to ₹3,272.5 crore in the June-end quarter of FY23, compared to ₹1,679.2 crore in the same period last year.
After reaching a 52-week low of ₹280.8 on March 8, 2020, Cochin Shipyard stock has gradually risen since then, returning 83.62% to date. Nearly after three years, the stock finally crosses the ₹500 mark on October 6. In the last one year, the stock has risen 39%.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.