10 hours Ago
PSU stocks have seen a heavy selloff in the past few days and the fall shows no signs of stopping. However, certain stocks continue to buck the trend. When looking for good public sector undertaking (PSU) stocks to buy, even in a bearish market, you should focus on companies with strong fundamentals and consistent performance that are resilient to economic downturns.
Here are the key factors that you should consider while evaluating such stocks: 1. Strong financials - Look for PSUs with healthy balance sheets, low debt-to-equity ratios, and consistent profitability. - Companies with stable cash flows and strong dividend payouts are preferable.
2. Defensive sectors - Focus on PSUs in sectors such as utilities (power generation and distribution), oil and gas, and infrastructure, which tend to perform well even during economic slowdowns. - Examples include NTPC (power) and Coal India (energy).
3. Government support - PSUs benefit from government backing, especially those in strategic sectors such as defense, energy and banking. - Check for recent government initiatives or policies that could boost the company's growth.
4. Valuation metrics - Look for undervalued stocks with low P/E ratios and high dividend yields. - Compare the stock's valuation with its historical performance and industry peers.
5. Market leadership - Choose PSUs that are market leaders in their sectors, as they are more likely to withstand market volatility. - Examples of these are Bharat Electronics Limited (BEL) and Power Grid Corporation.
6. Dividend history - PSUs are known for paying large, regular dividends. Look for companies with a strong track record of rewarding shareholders.
7. Sector-specific growth - Identify PSUs in sectors with long-term growth potential, such as renewable energy (NTPC Green Energy) or infrastructure development (IRCON). Three PSU stocks to buy today Here are some attractive PSU stocks in the current market, based on their fundamentals and potential for recovery: NTPC A leader in power generation, NTPC offers consistent performance.
It is also expanding into renewable energy, which makes it a resilient option. Factors that make NTPC a strong candidate Also read: These pointers are validated by the chart setup as we can note that prices are stabilising around 310 after a sharp fall from the highs of September. Constant volatility in the market means trends remain challenged at higher levels.
However, looking at the Relative Strength Index (RSI), the trends indicate on a larger timeframe that there is a revival in progress. This could be a good time to consider buying as larger timeframes indicate the important Fibonacci support region has been held since the start of the year. A rebound from here could help the stock scale an important value area around 370 in the next six months.
Oil and Natural Gas Corporation (ONGC) A key player in oil exploration and production, ONGC benefits from government backing and global energy demand. Factors that make ONGC a strong candidate Also read: After a stellar run, ONGC is facing trouble at higher levels amid a fall in crude prices over the past few months. The sharp drop since September 2024 has caused the stock to slide into a strong support region and the constant rebound from trendline support indicates a positive outlook.
The RSI is also attempting to hold back at the neutral zone, showing intention of a reversal. Hence, this could be a good time to go long as upward potential towards the 300 zone is seen over the next six months. Bharat Electronics Limited (BEL) A leader in defence electronics, BEL is well-positioned to benefit from increased government spending in the defence sector.
Factors that make BEL a strong candidate Also read: Despite the trends facing challenges at higher levels, forcing the overall market to reconsider a long opportunity at this level, this stock has managed to hold back the bearish bias and reinforce its bullish momentum. The trends clearly indicate that the reaction into the 260 region from where it is currently rebounding is a strong Fibonacci support zone. Also, the RSI is steadily rising and this could fuel the upward momentum.
A combination of positive newsflow and encouraging price action suggests more upside is possible in this counter, which could retest previous highs of 340 in the next six months. Also read:.
