Virender Sehwag tweeted on PSU stocks
On September 19, Virender Sehwag tweeted on PSU stocks, after which government companies came into the news again. Sehwag wrote that there are still some stocks which are 20% below their high and there is a good opportunity in them. Shares of PSU banks – including Canara Bank, Bank of Baroda and Union Bank – have fallen by more than 20%, while the market is at record highs.
Data shows that a look at these stocks shows that these stocks have fallen a lot. Now look, with a decline of 48%, MTNL shares fell to Rs 52.95 on September 19, 2024, while the stock reached a 52-week high of Rs 101.88 on July 29, 2024.
Gujarat State Financial Corporation, Cochin Shipyard and Garden Reach Shipbuilders & Engineers
This was followed by Gujarat State Financial Corporation, Cochin Shipyard and Garden Reach Shipbuilders and Engineers, which have fallen more than 40% from their 52-week high. Now the question on everyone’s mind is why are PSUs falling. Trivesh D, COO of Tradejini, said, “The rally in government companies has been tremendous in the last one year. Now these stocks are going into consolidation. I would advise investors to look elsewhere for now as I see a risk of further correction in the coming weeks.
“The BSE PSU index has rallied 119% in the last two years. But it has corrected 11% since its 52-week high on August 1, 2024.
The remaining shares fell
Other stocks that fell include Dredging Corporation of India, MSTC, Shipping Corporation of India, Tourism Finance Corporation of India, Bharat Dynamics, IRCON International, MOIL, Mangalore Refinery and Petrochemicals and Bharat Immunologicals and Biologicals Corporation, which have fallen between 35% and 40% so far.
Vinod Jhaveri, Independent Analyst, Pure Technicals said, “The Nifty PSU Bank index performed stellar from 3,520 to 8,050 from March 2023 to June 2024, delivering a ROI of 128%. The index has declined 19% since then.
After a good consolidation, another surge in the uptrend
He said that after a good consolidation, a bullish bounce could come again. Some of the PSU banks including UCO Bank have fallen up to 32.80% from their 52-week highs so far. Indian Overseas Bank, Jammu & Kashmir Bank, Bank of India, Punjab & Sind Bank, Union Bank of India, Punjab National Bank, Central Bank of India and State Bank of India have fallen between 13% and 32% from their 52-week highs.
Trivesh D of Tradejini said, “We are not bullish on any PSU stocks at the moment as current prices are stretched and deviated from their actual intrinsic value.
The data also revealed that
The data also highlighted that select railway stocks also declined by more than 20%. This includes Rail Vikas Nigam Limited (down 21%), Indian Railway Finance Corporation (down 23%), IRCTC (down 23%) and RailTel Corporation of India (down 27%).
Himanshu Kohli, co-founder of wealth management firm Client Associates, also told Business Today that the rally in PSU stocks will not continue as the focus will now be on quality stocks.