Indian PSUs – Scripting A Comeback Story: Motilal Oswal's Analysis

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Motilal Oswal Report.Most of the Indian public sector undertakings are present in deep cyclical industries (metals, oil and gas, and financials) and thus have inherently volatile and cyclical profitability/ market-cap performance. A large part of the FY12-22 decade was spent in cleaning up the balance sheets of financials, which took its toll on the overall PSU profits as PSU banks formed one-third of the profit pool of Indian PSUs. This coupled with several other macro disruptions kept the PSU profit pool suppressed over FY12-20. The PSU story is essentially of two halves: during the first half (FY12-17), profitability and market-cap performances were extremely tepid with overall PSU profits declining at 5% compound annual growth rate and BSE PSU index generating returns at 3.3% CAGR; andover the second half (FY17-22), PSU profits expanded at 22% CAGR while BSE PSU index remained flat. Subsequently, PSU Index rose 17% post April 2022. In fact, PSU profits declined at 4% CAGR even over FY12-20 and BSE PSU Index was 8% lower as of FY21 than in FY12..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Indian PSUs – Scripting A Comeback Story: Motilal Oswal's Analysis

After years of underperformance, PSU Index has outperformed Nifty in CY22.

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