PSU shares recover from sharp correction, but pressure remains on some stocks

Among railway stocks, IRFC gained over 11 percent and was trading at Rs 148.75. RVNL also gained over 10 percent and was trading at Rs 252.80. IRCON gained 8 percent and was trading at Rs 210.80.

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26 Aug, 2025 12:21

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Stocks of state-run companies advanced on February 13, recovering from a sharp correction seen in these scrips, including banking and railway shares, in the previous session. At 11am, the BSE PSU Index was trading at 17,851, around 1.6 percent higher. On February 12, the index fell by 1.7 percent, recording its steepest drop since January 23.

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Kranthi Bathini of WealthMills Securities told Moneycontrol that profit-booking was inevitable in PSU stocks after the rally through the last one year. He sees ample opportunities still in the counter on a medium to long term basis. "They are in momentum in nature, one need to exercise strict stop-losses when trading in these stocks in the short term. But going ahead, we can see some kind of value in the defence and railway stocks."

PSU stocks, including Life Insurance Corp of India, Indian Oil Corp Ltd and NHPC, NTPC and ONGC, saw major impact on February 12. A day later, LIC was trading at Rs 1,012.55 (-0.89 percent), Indian Oil Corp Ltd at Rs 175.70 (+0.17 percent), NHPC at Rs 86.25 (+6.4 percent) and ONGC at Rs 261 (+1.2 percent).

Also read: Govt loses Rs 3.8 trillion wealth in PSU stocks crash days after setting tall divestment target

In a February 6 report, Kotak analysts said that PSUs in the capital goods sector have seen a sharp rerating in their multiples over the past year, driven by a sharp increase in order books and elevated profitability and returns. "The market is underestimating the downside risks in assuming large order inflows for an extended period of time and perpetually elevated margin/return profile," it said.

Among railway stocks, IRFC gained over 11 percent and traded at Rs 148.75. RVNL also gained over 10 percent and traded at Rs 252.80, while IRCON gained 8 percent to Rs 210.80.

The benchmark Nifty 50 had a muted start on the day and was trading at 21,733.85, around 0.55 percent higher than the February 12 close. The BSE Sensex was trading at 71,523.44, around 0.66 percent higher.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.