The performance of PSU stocks in 2023 had been phenomenal, surpassing analysts' expectations and outshining many private counterparts, owing to the government's robust capital expenditure in key sectors such as railways, defence and power.
The anticipation of the BJP's potential re-election next year adds a favourable outlook for continued capital expenditure, enhancing the overall appeal of PSU stocks. The BSE PSU index, reflecting public sector enterprises' performance, surged by 55% in 2023, surpassing the 18.74% return of the benchmark BSE Sensex index.
The railway stocks have been on investors' radar ever since the government raised the capital outlay for the Indian Railways in the Union Budget 2023-2024. In addition, the new shipping and rail transportation corridor linking countries across the Middle East, South Asia, and Europe announced at the G20 summit also added momentum to railway stocks.
It is worth noting that the performance of railway PSUs this year has been spectacular, as these stocks more than tripled investors' wealth in less than a year on the back of huge order inflows and improved financials.
Defence stocks also doubled investors' wealth, fueled by strong order wins as the government focuses on boosting domestic procurement and reducing dependence on defence imports.
Amid this backdrop, all 13 'Maharatna' stocks delivered positive returns in 2023, with some of them delivering multibagger returns. 'Maharatna' is a status assigned to certain large and financially sound Central Public Sector Enterprises (CPSEs) in India. The status is conferred by the Government of India, and these companies are considered to be leaders in their respective sectors.
| Stock name | Returns in 2023 |
| REC | 254% |
| Power Finance Corporation | 238% |
| Bharat Heavy Electricals | 144% |
| NTPC | 87% |
| Oil India | 79% |
| IOC | 70% |
| HPCL | 70% |
| GAIL | 69% |
| Coal India | 67% |
| SAIL | 50% |
| Power Grid Corporation | 47% |
| ONGC | 40% |
| BPCL | 36% |
| Source: Trendlyne |
Power stocks took the lead, driven by a surge in power demand aligned with the uptick in economic activities. Rural Electrification Corporation delivered a whopping return of 254%, while Power Finance Corporation achieved a gain of 238%.
Another standout performer was Bharat Heavy Electricals, delivering a multibagger return of 144.26% in 2023. NTPC, another power-related stock, saw its shares achieve their best yearly gain of 87% in 2023.
The stocks of India's premier fuel retailers—IOC (Indian Oil Corporation), BPCL (Bharat Petroleum Corporation Limited), and HPCL (Hindustan Petroleum Corporation Limited)—have rallied between 36 and 70%, due to the improvement in refining margins on the back of a sharp drop in crude oil prices.
Coal India, the world's largest coal miner, saw its shares deliver the best annual performance in 2023 by gaining 67%. The shares of SAIL made a solid rebound in 2023, with a gain of 50% following a weak performance in 2022.
Other stocks, such as Oil India, Power Grid Corporation, GAIL, and ONGC, have also finished 2023 with gains of 40–80%.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
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Business NewsMarketsStock Markets2023 in Review: All 13 Maharatna stocks delivered positive returns last year, REC best performer; check full list
