CPSE stocks on a roll; BEML Land, NBCC, Engineers India rally up to 20%

The shares of Central Public Sector Enterprises (CPSEs) were on a roll on Friday as they rallied up to 20 per cent on the BSE in the intraday trade, a day after the government increased capex outlay by 11.1 per cent to Rs 11.1 trillion for FY25 (3.4 per cent of GDP) as compared to Rs 10 trillion in FY24.

According to SBI Capital Markets (SBICAPS), the enhanced profitability of public sector banks (PSBs) and CPSE is anticipated to contribute to improved dividend payouts, potentially surpassing FY25 Budget Estimates (BE) projections. The brokerage firm said its calculations suggest that the government could exceed FY25BE revenue receipts by around Rs 70,000 crore.

The Nifty CPSE index surged 4 per cent and the Nifty PSE index gained 3.4 per cent; while the S&P BSE CPSE and the S&P BSE PSU Index rallied 3 per cent. These indices hit their respective record highs on Friday. In the past month, they surged 16 per cent. By comparison, the S&P BSE Sensex and Nifty 50 advanced less than 1 per cent on Friday.

As many as 12 stocks from the index hit their respective all-time highs in the intraday trade on Friday. These included NTPC, Power Finance Corporation (PFC), Power Grid Corporation of India, BEML, BEML Land Assets, Hemisphere Properties India, Housing & Urban Development Corporation (Hudco), NHPC, NLC India, and SJVN.

Oil marketing stocks, Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL) and Indian Oil Corporation (IOC), too, hit record highs and rallied between 5 and 10 per cent on account of Brent crude falling to a nearly 1-month low at $78/bbl amid a ceasefire in the Middle East.

According to analysts at Enkay Global, unchanged retail fuel prices in the face of falling crude oil prices meant that margins of OMCs widened, which resulted in higher dividends for the government from PSUs.

"The non-tax revenue is budgeted to rise a tad slower in FY25, albeit is still healthy, possibly led by RBI dividend amid consistent FX sales and healthy PSU dividends, largely similar to last year’s bumper surplus," analysts at the brokerage said in their Union Budget Review report. 

Meanwhile, among other individual stocks, BEML Land Assets (up 20 per cent at Rs 312.45), NBCC (India) (up 20 per cent at Rs 170.45), and Engineers India (up 16 per cent at Rs 273.85) soared more than 15 per cent intraday. In the past two days, the market price of BEML Land Assets has zoomed 37.3 per cent, while that of NBCC has edged 32 per cent higher after Finance Minister Nirmala Sitharaman presented the Interim Budget on Thursday.