Stock market review for FY2024: BSE PSU index gains 92%, 37 stocks rise over 100%; Check out the top winners

Stocks of Indian state-owned enterprises witnessed an unprecedented rise in FY24, outperforming even medium and small cap stocks and emerging as the notable market leaders.

This performance is particularly notable given the pressure that PSU stocks faced before beginning their upward trend in 2020. The BSE PSU index, a barometer of performance of public sector companies, rose from 9,497 points to 18,274 points, registering a stellar rise of 92.4%. .

The government's accelerated capex, coupled with industry-specific reasons, helped PSU stocks post record gains in FY24. In the recent interim budget (FY24-25), the government increased capital expenditure by 11.1% ₹11,11,111 crore, which is 3.4% of the GDP.

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Additionally, the prospect of political stability, especially given the BJP's expected victory in the upcoming Lok Sabha elections in May, has emerged as an important factor in FY24. This expectation has created an optimistic mood among investors and reinforced forecasts for sustained capital expenditure (capex) growth.

Furthermore, the combination of strong order acquisitions from the private sector coupled with limited liquidity in PSU stocks, largely due to significant government participation, has created a gap between supply and demand. This discrepancy has subsequently led to an increase in share prices.

Additionally, the government's target of limiting the fiscal deficit to 5.1% for FY25 has further helped the PSU Bank shares. Their robust performance in the first three quarters of FY24 has also boosted their stock values.

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In the first nine months of FY2024, PSU banks witnessed significant improvement with profits increasing by 40% ₹98,358 crore. Due to this improved profitability, PSU banks are expected to achieve dividend payout of more than 30% ₹15,000 crore in FY24, PTI reported citing sources.

On the other hand, the railway sector showed excellent performance in FY24, owing to the government's strong emphasis on transformation. This focus resulted in significant order intake for the railway companies and contributed to their robust performance.

The significant increase in demand for electricity has led to a strong development in the share prices of companies in the energy sector. These include power generators, distributors and financing companies, all of which hit record highs in FY24.

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Likewise, the defense sector recorded significant growth, supported by higher budgetary allocations, significant contract wins and government initiatives to improve domestic procurement and reduce dependence on defense imports.

Additionally, oil PSUs have also performed impressively, benefiting from an extended period of stable fuel prices until the recent cut ₹2 for petrol and diesel prices.

Phenomenal performance

Of the 56 stocks listed in the BSE PSU index, an impressive 37 stocks, accounting for 66%, have delivered multibagger returns ranging from 100% to 460%. Topping the list is IRFC, which has demonstrated outstanding performance, closing nine out of 12 months in FY2024 with gains, resulting in an exceptional return of 458%.

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Close behind, HUDCO secured the second position with a remarkable return of 359.5%, marking its best fiscal performance since its listing in 2017. MRPL took the third position in the index with a remarkable return of 330%, followed by Cochin Shipyard, Ircon International, REC, SJVN, NBCC (India), Rail Vikas Nigam, Bharat Heavy Electricals, Power Finance Corporation and NLC India, all with returns ranging from 200% to 330%.

Among other notable performers are stocks like Mazagon Dock Shipbuilders, Hindustan Copper, ITI, Engineers India, Indian Overseas Bank, Punjab National Bank, Bank of Maharashtra, Central Bank of India, General Insurance Corporation of India, HAL, Punjab & Sind Bank, MMTC , Union Bank of India, The New India Assurance Company, Oil India, KIOCL, UCO Bank, NHPC, Mishra Dhatu Nigam, Bharat Electronics, IOC, Canara Bank, Coal India, HPCL and NALCO have delivered returns between 100% and 195% %.

Disclaimer: We recommend that investors consult certified experts before making any investment decision.

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