Archive · 21 Nov 2025
4 PSU Giants Still Trading at a Discount Despite Strong Performance
Four big Indian companies owned by the government (PSUs) are still considered good value for money even after their stock prices have gone up a lot in the last few years.
These companies have done well because they have cleaner finances, better decisions, and helpful government policies.
They have a lot of orders to fill in the future, which means they will make money for a long time.
Even though they are cheaper than other similar companies, they are still more expensive than they used to be.
But, because they have a lot of orders and are expected to do well in the future, it's okay for them to be a bit more expensive.
Bharat Electronics (BEL), Hindustan Aeronautics (HAL), Garden Reach Shipbuilders (GRSE), and National Thermal Power Corporation (NTPC) are four state-owned giants trading below their respective industry multiples
These companies have cleaner balance sheets, better capital allocation, and clear policy support, driving their strong performance over the last three years
BEL, HAL, and GRSE have strong order books providing multi-year revenue visibility, while NTPC is expanding its renewable energy capacity and nuclear business
All four companies trade below their industry P/E but above their own 5-year median P/E, suggesting they are still undervalued compared to their peers
The defense names draw support from their strong order books and steady pipelines, justifying their higher multiples
- Who
- Bharat Electronics, Hindustan Aeronautics, Garden Reach Shipbuilders, National Thermal Power Corporation
- What
- Trading at a discount to their industry peers despite strong performance
- When
- Over the last three years and currently
- Where
- India
- Why
- Due to cleaner balance sheets, better capital allocation, clear policy support, strong order books, and expansion plans
Value Investors
Growth Investors
Order Book Visibility
Value Investors
Strong order books provide multi-year earnings confidence and justify higher multiples
Growth Investors
Order books may not fully materialize, and competition could erode margins
Valuation
Value Investors
Companies are still undervalued compared to their peers despite recent re-rating
Growth Investors
Companies may be fully valued given their strong performance and future growth prospects
- Primary Business
- Defense (BEL, HAL, GRSE) and Power Generation (NTPC)
- Order Book Visibility
- Multi-year revenue potential for BEL, HAL, and GRSE; 10-year potential for GRSE
- Renewable Energy Expansion
- NTPC aims to expand renewable energy capacity to 60 GW by FY32 and 130-140 GW by FY37
- Industry P/E
- BEL: 29.1, HAL: 17.5, GRSE: 26.4, NTPC: 10.1
- 5-Year Median P/E
- BEL: 67.4, HAL: 37.9, GRSE: 53.1, NTPC: 27.3