3 High-Potential PSU Stocks Under ₹100 with Strong Piotroski Scores to Watch in 2024
3 High-Potential PSU Stocks : Public Sector Undertakings (PSUs) are government-owned corporations that play a pivotal role in India’s economic landscape. These entities, with the government holding at least 51% of their paid-up share capital, are instrumental in driving infrastructure development and ensuring equitable economic growth. Investors often find PSUs attractive due to their inherent stability and the backing of the government, which reduces default risks. For those seeking value investments, combining the affordability of PSU stocks priced under ₹100 with a high Piotroski Score—a measure of a company’s financial strength—can be a strategic approach. The Piotroski Score, developed by Stanford accounting professor Joseph Piotroski, ranges from 0 to 9, with higher scores indicating robust financial health.
Here are three PSU stocks under ₹100 with commendable Piotroski Scores that merit attention:
1. Bank of Maharashtra
Bank of Maharashtra is a prominent public sector bank offering a wide array of banking services, including treasury operations, corporate and wholesale banking, retail banking, and other banking operations. As of December 2024, the President of India held a 79.6% stake in the bank, underscoring significant government backing.
Key Financial Metrics:
| Metric | Value |
|---|---|
| Market Capitalization | ₹34,319.7 crores |
| Current Stock Price (as of Monday’s trading session) | ₹47 |
| Piotroski Score | 7 |
| Net Interest Income (Q3 FY25) | ₹2,943.6 crores (up 19.4% YoY) |
| Net Profit (Q3 FY25) | ₹1,406.7 crores (up 36% YoY) |
The bank’s consistent growth in net interest income and net profit reflects its strong financial performance and operational efficiency. Its extensive branch network and focus on retail banking make it a significant player in India’s banking sector.
2. NBCC (India) Limited
NBCC (India) Limited, a Navratna enterprise under the Ministry of Housing and Urban Affairs, operates primarily in project management consultancy, engineering procurement & construction, and real estate. The company’s expertise in these domains has positioned it as a leader in the construction and real estate sectors. As of December 2024, the President of India held a 61.75% stake in NBCC.
Key Financial Metrics:
| Metric | Value |
|---|---|
| Market Capitalization | ₹19,883 crores |
| Current Stock Price (as of Monday’s trading session) | ₹74.5 |
| Piotroski Score | 8 |
| Revenue from Operations (Q3 FY25) | ₹2,827 crores (up 16.6% YoY) |
| Net Profit (Q3 FY25) | ₹142 crores (up 24.6% YoY) |
NBCC’s robust financial performance, characterized by significant growth in both revenue and net profit, highlights its operational efficiency and strong market position. The company’s involvement in various high-profile projects across the country underscores its importance in India’s infrastructure development.
3. Balmer Lawrie Investments Limited
Balmer Lawrie Investments Limited is engaged in diverse business activities, including industrial packaging, greases & lubricants, and leather chemicals. The company’s diversified portfolio allows it to mitigate risks associated with any single sector. As of December 2024, the President of India held a 59.67% stake in Balmer Lawrie.
Key Financial Metrics:
| Metric | Value |
|---|---|
| Market Capitalization | ₹1,343 crores |
| Current Stock Price (as of Monday’s trading session) | ₹62.9 |
| Piotroski Score | 9 |
| Revenue from Operations (Q3 FY25) | ₹633 crores (up 8% YoY) |
| Net Profit (Q3 FY25) | ₹64 crores (down 6% YoY) |
While the company experienced a slight decline in net profit, its high Piotroski Score of 9 indicates strong financial health. The diversified nature of its business operations provides a buffer against sector-specific downturns, offering stability to investors.
Understanding the Piotroski Score
The Piotroski Score is a valuable tool for investors to assess a company’s financial strength. It evaluates nine criteria across three main categories:
- Profitability:
- Positive return on assets (ROA)
- Positive operating cash flow
- Higher ROA compared to the previous year
- Operating cash flow exceeding net income
- Leverage, Liquidity, and Source of Funds:
- Lower ratio of long-term debt to total assets compared to the previous year
- Higher current ratio (current assets divided by current liabilities) than the previous year
- No issuance of new shares in the past year
- Operating Efficiency:
- Higher gross margin compared to the previous year
- Increased asset turnover ratio
A score closer to 9 suggests that the company is financially sound, making it a potentially attractive investment.
Conclusion
Investing in PSUs with strong financial metrics and government backing can offer a blend of stability and growth potential. The three companies highlighted above—Bank of Maharashtra, NBCC (India) Limited, and Balmer Lawrie Investments Limited—not only trade below ₹100 but also boast high Piotroski Scores, indicating robust financial health. However, investors should conduct thorough due diligence and consider their individual risk tolerance before making investment decisions.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.