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Stocks of public sector undertakings (PSUs) have been on an uptrend, rallying in the last 1 year. The Nifty PSE index has outperformed the benchmark Nifty for the first time in 5 years.

The Nifty PSE index has risen 83 percent in the last 1 year as compared to a 55 percent rise in the Nifty50 index in this period. So far in 2021, The PSE index has added over 50 percent versus a 30 percent rise in the Nifty.

The past performance shows that the PSE index has underperformed the benchmarks. In 2020, 2019 and 2018, Nifty PSE shed 13 percent, 5 percent and 21 percent, respectively, as against a rise of 15 percent, 11 percent and 3 percent, respectively in the Nifty50 index.

Most experts are also positive on the public sector stock in the near-to-medium term and expect further rerating of these stocks in the future on the back of divestment plans, supply concerns etc. The recent sale of Air India to Tata Group is a positive trigger for PSU stocks. While the privatisation processes can be long and tedious, it could also be a huge potential opportunity for the stocks.

Most PSU stocks generated positive returns for their investors in the last 1 year. Let's look at the stocks which rallied over 200 percent.

Hindustan Copper: The stock has risen over 290 percent in the last 1 year. A rise in copper prices, reduction in production in China are a few key reasons for its rise. It is a Government-owned corporation in the Central Public Sector Enterprise under the Ministry of Mines and is the only copper producer and is engaged in exploration, exploitation, mining of copper and copper ore, including beneficiation of minerals, smelting and refining. In Q1, the firm reported a 53.6 percent rise in consolidated net profit at 45.63 crore. The government recently decided to sell a 5 percent stake in the firm through an offer for sale.

NALCO: The stock has rallied nearly 250 percent in the last 1 year. The aluminum prices recently surged to their record high and the decline in production in China led to this rise in NALCO's stock price. NALCO is a Navratna company registered in 1981 under the ministry of Mines. The Company’s operations are in mining, metal and power. The firm reported a massive jump in net profit in Q1 at 347.73 crore compared with 16.63 crore in the year-ago quarter. Revenue from operations rose 79.2 percent at 2,474.55 crore versus 1,380.63 crore in the year-ago period.

SAIL: The stock rose over 240 percent in the last 1 year. The main reason for this rally is the run-up in commodity prices. Also, the government's infra boost also added to the positive sentiment. Ace investor Rakesh Jhunjhunwala also added the stock to its portfolio in the June 2021 quarter. In Q1, SAIL returned to the black and reported a net profit of 3,897.36 crore versus a loss of 1,226.47 in the year-ago quarter. Net income also more than doubled to 20,754.75 crore compared with 9,346.21 crore in the year-ago period. SAIL is the biggest steel-making company in the country and is engaged in the manufacturing of flat products, such as hot-rolled (HR) coils, HR plates, cold rolled (CR) coils, pipes and electric sheets, and long products, such as thermo mechanically treated (TMT) bars and wire rods.

Indian bank: The stock rallied 220 percent in the last 1 year. In Q1, the public sector lender reported a 220 percent rise in its net profit to 1,182 crore versus 369 crore in the year-ago quarter. Total income stood at 11,500 crore in Q1 as against 11,447 crore in the year-ago period. The stellar growth in the lender has been a result of the increase in its bottom line, non-interest income and decrease in expenditure and operational efficiencies.

IRCTC: The stock rose 217 percent in the last 1 year. The stock had been a consistent performer, since it made its debut in October 2019, rising nearly 900 percent since listing till October 19, 2021. Just in the last 3 months, the stock surged over 100 percent on the back of a rise in ticket bookings and travel plans as the economy opened up after COVID restrictions. Further, the announcement of a stock split added to the gains. It was also listed at an over 100 percent premium at 644 against its issue price of 320. The expansion plans of the firm showcase further potential of an upside in the stock in the long run. The company has been expanding its business to bus, air tickets as well as tour and travel planners. This could open up a whole new potential opportunity for the firm to strengthen its position. Further, the firm is also looking to apply for a payment aggregator license from the RBI, which will not only make it easier for customers but also bring in additional revenue.

Apart from these, Oil India, SBI, BHEL, ONGC, J&K Bank, Bharat Electronic, etc are also some of the other PSU stocks which doubled investor wealth in the last 1 year.

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