The historical 20-year average is 21%, implying enough growth headroom for PSU stocks to grow from current levels.Monday's session saw the BSE PSU index ending nearly 8% higher with power and bank stocks leading the list of winners. Back in the 2014 election, the PSU index had rallied 82% in 10 months while in 2019 PSUs had seen an 18% upside in 7 months.In both cases, PSU stocks topped out a few weeks after the election results in the month of June. "Many narrative and PSU stocks are trading at outlandish multiples and are factoring in optimistic volume and profitability assumptions. "Furthermore, the PSU Index currently attributes 37% of the price to long-term growth expectations, above historical highs of 35% in FY17. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own.

Source: Economic Times June 04, 2024 14:42 UTC