Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Underperformance of BSE PSU Index
Oct 10, 2018


Since we are talking about PSUs, I thought, it would be an interesting to compare how these stocks performed compared to the frontline index - BSE Sensex.

The BSE-PSU index, which includes many companies from the PSU space, considerably underperformed the BSE Sensex.

For three out of five years, the BSE-PSU index considerably underperformed the BSE Sensex. From 2014 till date, the BSE-PSU index gave a meagre annualised return of 3%. Whereas, the BSE Sensex delivered 14%.

This underperformance can be attributed to sector specific events such as non-performing assets (NPAs) in the banking space and rising oil prices that impacted OMCs, among others.

In Smart Money Secrets, we are not yet comfortable with the PSU space. We prefer owner-operator driven companies run by excellent management.

This month's upcoming recommendation is one such example. It fares very well on our proprietary tool - Smart Money Score.

A long runway for growth, strong sectoral tailwinds, negative working capital, strong brand recall, undervaluation of two of its business segments, and corporate restructuring of one of its business units to unlock shareholder value are some the key triggers for this company.

Watch this space!

Data Source: BSE India
2018* - Data till 8 October

This Chart Of The Day was published in The 5 Minute WrapUp - My Letter to PSU Companies: Why We're Not Recommending Your Stocks

Equitymaster requests your view! Post a comment on "Underperformance of BSE PSU Index". Click here!

  

Our Most Popular Charts

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get our special report, Secret to Increasing Your Trading Profits Today Now!
We will never sell or rent your email id.
Please read our Terms

MARKET STATS