Froth remains in select PSU stocks; Q4, a test for sustainable financials

Among PSUs, Railway stocks such as Rites, IRFC and IRCTC dipped by 21.3 per cent, 8.1 per cent and over 2 per cent respectively in March, Ace Equity data shows

Shares of public sector enterprises have corrected by up to 22 per cent month-to-date until March 19, 2024. Analysts attribute this steep fall to the valuation exuberance seen after a sharp run in these counters last year and suggest investors remain selective regarding the stocks in this space.

“The rally in public sector undertaking (PSU) stocks has been stretched and sharp, although it is somewhat justified by improvements seen in earnings, operations, balance sheets, and overall profitability. Traditionally, PSU stocks have traded significantly lower than their private peers due to unpredictability in state policy and lack of long-term vision,” said