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Introduction
LIC share price: During a recent debate in the parliament about a no confidence motion, Prime Minister Narendra Modi addressed concerns raised by the opposition parties regarding the management of Public Sector Undertaking (PSU) companies. He highlighted that despite the criticism, PSUs are performing well and delivering strong results, competing effectively with their private sector counterparts. This article provides a simplified overview of the PM’s comments, the experts’ opinions, and the potential opportunities for investors in the PSU segment.
PM Modi’s Take on PSU Performance
In the parliamentary debate, PM Modi responded to opposition criticisms of his government’s handling of PSU companies. He pointed out that the PSUs are not just surviving but thriving, showcasing robust numbers in various sectors. For instance, he mentioned that Hindustan Aeronautics (HAL) achieved its highest ever revenue while the Life Insurance Corporation (LIC) of India continued to excel despite challenges raised by opposition parties.
In a light-hearted manner, PM Modi suggested that stock market investors might want to take cues from the opposition parties when considering their investment decisions. He jokingly advised them to consider buying PSU stocks that the opposition criticizes in the future.
Experts’ Insights on PSU Investment In LIC
While PM Modi’s recommendation was made in jest, experts in the stock market believe that it could be a good time to consider investing in PSU stocks, particularly in the banking and power sectors.
Experts attribute this potential to the recent changes in the management of PSU companies. High skilled professionals have been recruited to revamp the operations and strategies of these companies. This shift has led to increased capital expenditure reduced provisions and a decline in non performing assets. As a result, companies like HAL and LIC have reported strong financial performances a trend that is predicted to continue.
The Evolving Role of PSU Companies
The management overhaul of PSU companies has empowered them to compete more effectively against their private sector counterparts. For example, the consolidation of Indian PSU banks has led to a decrease in their Cost of Savings Account (CASA) without significant changes to their business models. This has enabled banks like State Bank of India (SBI) to generate higher profits than even prominent private sector companies such as Reliance Industries Ltd.
Promising Picks from the PSU Segment
When considering PSU stocks for investment experts have identified a few segments that show potential:
1. Banking Sector
For banking PSU stocks experts recommend focusing on the CASA of the banks. Since the net interest margins of Indian banks have reach their peak CASA is expect to play a pivotal role. Larger banks like SBI, Bank of Baroda, and Canara Bank are anticipate to continue attracting business due to their lower cost of lending compared to smaller banks.
2. Power Sector
In the power sector within the PSU segment, power stocks are available at appealing valuations. With an expected double digit growth in demand for power, stocks from companies like NTPC, NHPC, Power Grid Corporation and Satluj Jal Vidyut Nigam (SJVN) could hold promise for investors.
Conclusion
The recent parliamentary debate regarding the performance of PSU companies and Prime Minister Narendra Modi’s light hearted advice to investors to consider PSU stocks has sparked interest in this segment. Experts highlight the positive shifts in PSU management, leading to improved financials and competition with private sector peers. While considering investments in PSU stocks, it is important for investors to conduct thorough research analyze their risk tolerance, and consult certified experts to make informed decisions.
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