Indian markets closed positive on Thursday and buying was witnessed in many public sector companies during today's session. The public sector stocks are mainly driven by optimism around defense contracts, renewable energy momentum, and volatility in commodity-linked counters. From Dredging Corporation’s rebound to Engineers India’s consultancy surge and GRSE’s defense windfall, investor sentiment is being shaped by sector-specific catalysts and evolving guidance. Meanwhile, divergent opinions on names like NMDC and IREDA reflect the uncertainty in global pricing cycles and policy environments.

Dredging Corporation of India: Operational Efficiency Sparks Optimism Amid Annual Loss

The stock surged 8.28% on May 29, 2025, outpacing the broader sector by 7.5%, propelled by strong quarterly results despite full-year losses.

Q4FY25 net sales soared 93.1% YoY to Rs 462.41 crore, with the company rebounding to a profit of Rs 24.06 crore and recording a five-quarter-high operating margin of 16.58%.

Yet, annual FY25 figures paint a more sobering picture, with a net loss of Rs 274.6 million, even as full-year revenue rose 21% to Rs 11.5 billion.

The key concern remains debt sustainability, as analysts caution that margin momentum must be matched with prudent financial management to maintain investor confidence.

Engineers India Ltd (EIL): Margin Expansion and Order Book Diversification Reinforce Bullish Outlook

Engineers India reported a stellar Q4FY25, with profit jumping 2.5x YoY to Rs 243 crore, aided by an Rs 82 crore write-back and rigorous cost control.

For the full year, profit climbed 30% YoY to Rs 465 crore, marking a decade-high figure and reflecting operational resilience across cycles.

The company boasts a robust order book of Rs 11,700 crore as of March 2025, with an encouraging 45% contribution from non-oil and gas sectors.

IREDA: Valuation Reset Continues as Investors Await Policy Clarity

IREDA has experienced a sharp 45% correction from its July 2024 peak of Rs 310, trading at Rs 168.40 on May 14, well below its 200-day EMA.

Despite short-term technical weakness, FIGW projects a 2025 target of Rs 252.10, representing a 50% upside based on anticipated renewable energy demand.

Analyst Shitij Gandhi of SMC Global Securities adopts a cautious stance, suggesting the stock remains range-bound between Rs 140 and Rs 180. A breakout above Rs 180 could signal renewed upward momentum.

Key catalyst: favorable renewable energy policies and resolution of margin pressures could reignite interest in the medium term.

REC Ltd: Trimmed Growth Guidance Weighs on Sentiment, But Financials Remain Solid

REC recently reduced its FY26 AUM growth forecast to 11–13%, down from 15–17%, triggering a 3.2% dip in the stock on May 14.

The company’s ambitious roadmap includes a Rs 10 lakh crore loan book target by 2030 and aspirations for net-zero NPAs by FY26.

Q4FY25 results remain impressive, with net profit up 5.5% YoY to Rs 4,236 crore and Net Interest Income (NII) rising 37.6% to Rs 5,877 crore.

Strategically, REC’s success will depend on its execution of renewable JVs and sustained asset quality improvements amid tighter regulatory and environmental norms.

Garden Reach Shipbuilders & Engineers: Multi-Bagger Momentum Anchored in Naval Defense Orders

Shares of GRSE reached an all-time high of Rs 3,031 on May 29, 2025, marking a 157% gain from March lows on the back of record quarterly earnings.

Q4FY25 results revealed a 61% revenue jump and 118% growth in PAT, reaffirming the company’s robust execution capabilities.

The marquee Rs 25,000 crore Next-Generation Corvette (NGC) contract for the Indian Navy is expected to drive peak execution through FY26.

Antique Stock Broking has set a Buy target of Rs 3,009, while Asian Market Securities is more bullish with a target of Rs 3,500.

The company’s ahead-of-schedule delivery on P17 Alpha ships strengthens its credibility in India’s expanding defense manufacturing ecosystem.

NMDC Ltd: Diverging Analyst Views Reflect Commodity Uncertainty

Despite missing Q4 earnings expectations, NMDC’s stock gained 10% in May 2025, trading at Rs 71.87, buoyed by broader market optimism.

Full-year volume declined by 4% YoY, but strategic price hikes helped stabilize revenue, showcasing the company’s pricing power in the iron ore market.

Antique Stock Broking maintains a Buy recommendation with a target price of Rs 86, citing NMDC’s net cash position and expansion strategy.

However, Kotak Institutional Equities has issued a Sell call with a target of Rs 55, warning that aggressive capex plans and high iron ore prices may be unsustainable.

The key investment trigger will be volume recovery post-monsoon and diversification into lithium and coal mining segments.

Summary Table: Analyst Recommendations Snapshot

Investor Takeaway: Defensive Plays and Policy-Driven Sectors Hold the Key

As we move into the second half of 2025, defense contractors like GRSE and infrastructure consultants like Engineers India appear poised for sustained momentum, underpinned by government spending and order visibility. Meanwhile, renewable-focused names such as IREDA and REC offer structural tailwinds, albeit with near-term volatility tied to policy clarity and financial guidance. Commodity-linked players like NMDC face a more nuanced landscape, where execution risk and pricing dynamics could diverge sharply. Investors would do well to track upcoming monsoon trends, budgetary cues, and geopolitical shifts to navigate this intricate market terrain.