Despite profit booking triggering declines in small-cap and mid-cap index stocks, PSU bank shares continue to be favoured by bulls in the Indian stock markets. In the last few weeks of the trading on Dalal Street, three state-owned banks— Bank of Baroda, Canara Bank, and Punjab National Bank—saw a jump in their stock prices, taking their gains up to 20% in the last 1 month
Bank of Baroda's share price on Thursday opened on the upside and subsequently reached a new 52-week peak of Rs 213.20 per share on NSE. Bank of Baroda reported an 87.72% YoY jump in its net profit during April to June 2023 quarter
- Market Cap - Rs 1,07,926 crore
- P/E ratio(TTm) - 6.20
- P/B Ratio - 0.99
- Dividend Yield - 2.64%
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Canara Bank's shares on Thursday reached a fresh 52-week high of Rs 368.70 per equity share on NSE. Canara Bank reported 75% surge in its net profit in June quarter
- Market Cap - Rs 66,170 crore
- P/E ratio (TTM) - 5.16
- P/B Ratio - 0.89
- Dividend Yield - 3.29%
Punjab National Bank (PNB) on Wednesday led the rally in the 12-pack index of public sector undertaking (PSU) banks with gains of 9% in the trading session. In July, PNB reported a massive jump of 307% YoY in its net profit in June quarter
- Market Cap - Rs 79,874 crore
- P/E ratio (TTM) - 18.14
- P/B Ratio - 0.83
- Dividend Yield - 0.90%
Several factors contribute to the favouritism among investors towards PSU banks. One of these factors is the steady resurgence of the Indian economy, which has stimulated credit demand and created a conducive atmosphere for lending institutions
Post-Covid, PSU banks' stocks have been lagging behind the private sector peers and now with government aiming to fortify the banking sector, investors are taking an interest in these stocks. Government's tackling of NPA concerns of PSU banks has boosted investor trust