Stock-specific approach to investing in PSUs will yield returns: Experts

Attractive valuations not enough to be positive on the entire sector, say experts

Shares of state-owned companies have seen rising investor interest in recent months. The BSE PSU index has advanced more than 27 per cent in the past three months as compared to 22 per cent gain for the broader BSE 500 index. 

While they continue to lag their peers on the returns front over the long term, attractive valuations, higher dividend yield and hopes of improved earnings have increased the appeal of these stocks. What could improve sentiment for these stocks further is the buzz of performance-based incentives.

The BSE PSU Index trades at a price to earnings multiple of 10