Quick take: In 2025, metal‑focused PSU companies outperformed PSU banks, delivering double‑digit gains. With the 2026 Budget on the horizon, many retail investors are watching these trends closely.
2025 performance snapshot
Out of about 60 publicly listed PSU stocks, 24 beat the benchmark BSE Sensex, while 36 lagged behind. The metal, PSU‑bank, and defence segments led the winners’ list, some posting returns as high as 109%.
- Metals: Up to 109% gain.
- PSU banks: Around 55%–58% gain.
- Defence: Strong upside, though valuations are now high.
Conversely, power, railway and NBFC stocks fell about 35% on average.
Top earners
The biggest winner was Hindustan Copper, which more than doubled its price, delivering a 109% return. It was followed by:
- Gujarat Mineral Development Corporation (GMDC) – 86% gain
- Indian Bank – 58% gain
- Nifty PSU Bank index – 55% gain
Other notable gainers (11%–51% rise) included Garden Reach Shipbuilders & Engineers, NALCO, Bank of India, Bharat Electronics, Chennai Petroleum Corporation, BPCL, NBCC, BHEL, SBI, Bank of Baroda, HPCL, IOC, Punjab National Bank, Bank of Maharashtra, Mazagon Dock Shipbuilders, and Engineers India.
Stocks that struggled
Thirty‑six PSU stocks fell short of the benchmarks. While a few, like Cochin Shipyard, HAL, Coal India, Mangalore Refinery & Petrochemicals, NMDC Steel, and ONGC managed modest gains (up to 5%), many slipped into the red.
- Worst performers: IREDA (-35%), UCO Bank (-33%), Indian Overseas Bank (-30%).
- Other losers (over 20% decline): Power Finance Corp, The New India Assurance, NTPC Green Energy, SJVN, REC, Central Bank of India.
- Broad‑market drags: NTPC, HUDCO, LIC, Railtel, IRCTC (down up to 8%).
Why the Budget 2026 matters
Investors expect the upcoming budget to bring higher government spending, policy continuity, and reform measures that could lift PSU companies.
Expert view
Kranthi Bathini, Director‑Equity Strategy, WealthMills Securities says, “After a long consolidation in 2025, PSU stocks have started moving strongly, especially railway shares. The budget’s reform focus should broaden the rally, and current valuations look attractive.”
Dipan Mehta, Director, Elixir Equities adds a note of caution on defence stocks: “Defence firms have solid order books and policy support, but valuations are high and earnings can be volatile. Consider buying on price corrections.”
What retail investors should watch
- Metal‑linked PSU stocks may continue to lead if global copper demand stays strong.
- PSU banks could benefit from any credit‑growth measures in the budget.
- Defence stocks are worth monitoring, but buy on dips to manage risk.
Bottom line
2025 showed a clear split: metals outperformed banks, while power and railway assets lagged. With the 2026 Budget expected to boost spending on infrastructure and defence, many PSU stocks could see fresh interest. Retail investors should keep an eye on valuation levels and look for entry points, especially in metal and bank segments.
Remember, this is perspective, not prediction. Do your own research before making any investment decisions.