Public Sector Undertakings (PSUs) have always played a key role in India’s economy, providing important services and contributing to overall growth.
Recently, many of these PSUs are starting to show strong growth potential, moving beyond their traditional slow-paced image.
With new reforms, better management, and a focus on modernization, some PSU stocks are becoming attractive investment options.
Considering this, we applied a screener to identify the top PSU stocks which delivered sales and net profit compounded average growth rate (CAGR) of more than 15% over the last 5 years, had debt to equity ratio of less than 1 as of 31 March 2024, and which show promising prospects for the future.
Additionally, the below mentioned PSUs have been arranged in terms of the highest to lowest 5 years net sales CAGR.
These are not stock recommendations. Investors should do their own research and do due diligence before considering any investment in the stock market.
Also, investors should pay close attention to corporate governance while performing their due diligence.
#1 Garden Reach Shipbuilders & Engineers (GRSE)
First on this list is GRSE.
Garden Reach Shipbuilders & Engineers is a premier shipbuilding company in India under the administrative control of the Ministry of Defence, primarily catering to the shipbuilding requirements of the Indian Navy and the Indian Coast Guard.
The company’s revenue has grown at a CAGR of 21% in the last five years while its net profit has grown at a CAGR of 26.6%.
The company’s five-year average return on equity (RoE) and return on capital employed (RoCE) were 17.2% and 22.7%, respectively.
As of 31 March 2024, the company is net-debt free.
As of Q3 FY25, the order book stands at Rs 238.8 billion (bn), comprising 40 platforms across 10 projects.
Going forward, the management maintains a positive outlook, projecting a CAGR of 20-25% over the next five years.
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Currently, 4% of the order book is from exports, with expectations to quadruple this figure in the next four years.
Additionally, the management is optimistic about the future,
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