Top 3 High-Growth PSU Stocks to Watch in India 2024

Are you looking for growth opportunities in the Indian stock market? If yes, Public Sector Undertakings (PSUs) might just be what you’re missing. Once seen as slow and heavy giants, many PSUs have now transformed into leaner, more competitive businesses backed by strong government support.

In this blog post, we’ll explore the top 3 high-growth PSU stocks in India for 2024. These are companies that not only have solid fundamentals but also show impressive growth potential in the years ahead.

Let’s dive in!

Why Should You Consider PSU Stocks?

In recent years, PSU stocks have been catching the attention of investors—and for good reason. Here’s why they’re becoming more attractive:

• Government backing: PSU companies are often supported and funded by the Indian government, which provides them a safety net during tough times.
• Steady dividends: Most PSU stocks offer good dividend payouts, making them attractive for long-term investors.
• Strategic importance: Many PSUs operate in key sectors like energy, steel, oil and gas, and infrastructure, which are vital for India’s growth.
• Valuation potential: Several PSUs are trading below their intrinsic value, offering strong upside potential as reforms and privatization plans roll out.

Now that we’ve set the stage, let’s check out three PSU stocks that show promising signs for 2024.

1. Bharat Electronics Limited (BEL)

BEL is a leading aerospace and defense electronics company in India. It’s a major supplier to the Indian armed forces and also exports its products to over 30 countries.

What Makes BEL Stand Out?

• Strong revenue growth: BEL clocked a revenue of ₹20,000+ crores in FY23, marking a solid step up from previous years.
• Government contracts: With the Indian government focusing more on self-reliance in defense, BEL is sitting in a sweet spot to grab major defense deals.
• High export potential: BEL is expanding globally, aiming to increase exports to 15% of its total revenue.

Growth Snapshot:

– Revenue has grown at a CAGR (Compound Annual Growth Rate) of over 10% in the last five years.
– Net profit margin is healthy, and return on equity (ROE) stands around 20%, indicating efficient use of shareholder funds.

BEL’s continued investments in R&D and its solid order book make it a PSU to watch closely in 2024.

2. Hindustan Aeronautics Limited (HAL)

Next up is HAL, another public-sector star from the defense sector. Known for its aircraft manufacturing capabilities, HAL plays a key role in India’s defense aviation space.

Why HAL Is Flying High

• Strong demand: With rising global geopolitical tensions, countries are investing heavily in defense, and HAL is ready to meet those needs.
• Huge order book: As of FY23, HAL’s order book stood at ₹84,000 crores. That’s a big deal—it means the company has steady revenue lined up for the future.
• Focus on Make-in-India: HAL is building indigenous aircraft and systems, which aligns perfectly with Government initiatives.

Growth Snapshot:

– Five-year revenue CAGR of 6%
– Net profit margins above 20%
– Consistent dividend-paying record

Fun fact: HAL saw a sharp gain in its stock price recently after it won a contract to supply helicopters to the Indian Army. That’s real-world confidence right there!

3. Indian Renewable Energy Development Agency (IREDA)

IREDA might not be a household name yet, but it’s rapidly making waves in the green energy sector. As India pushes towards clean energy, IREDA’s role becomes more significant.

So, What Does IREDA Do?

IREDA is a government-owned financial institution that promotes and funds renewable energy projects across India. Think solar parks, wind farms, and bioenergy plants—IREDA is making them happen.

Why IREDA Is a Bright Spot

• Clean energy demand: The push for renewables is stronger than ever. India aims to hit 500 GW capacity from non-fossil fuel sources by 2030. That’s a big leap—and IREDA is helping finance that journey.
• Strong financial performance: In FY23, IREDA’s loan book witnessed healthy growth, and net profits grew over 67% year-over-year.
• Low NPAs (Non-Performing Assets): Compared to other financial institutions, IREDA has managed to keep its bad loans under control. That’s vital for consistent growth.

Growth Snapshot:

– Loan portfolio increased over 30% in one year
– Large untapped market in renewable project financing in India

If you’re bullish on sustainability, IREDA could be a hidden gem in your watchlist.

Wrapping It Up

There was a time when PSU stocks were typecast as dull, sluggish performers. But things have changed!

Whether it’s BEL with its cutting-edge defense tech, HAL’s expanding aircraft portfolio, or IREDA powering the future of clean energy—these PSU stocks are more dynamic than ever and show strong growth potential in 2024.

So, What Should You Do Now?

It’s always wise to do your own research before making any investment. PSUs can offer great returns, but they also come with their fair share of risks. Look into financials, management quality, and future outlook before you hit that “buy” button.

Also, keep one eye on government policies and budget announcements—they often play a big role in shaping the future of these companies.

Final Thoughts

If you’re looking to balance your portfolio with strong dividend-paying, growth-oriented, and strategically important companies, these PSU stocks deserve a spot on your radar in 2024.

So, are you ready to explore the power of Indian PSUs? Keep watching this space—we’ll bring more such insights soon!

Disclaimer: This blog post is for educational and informational purposes only. It does not constitute financial advice or stock recommendations. Please consult with a qualified financial advisor and conduct thorough research before making any investment decisions. Investing in the stock market involves risk, including the risk of loss.