Public sector stocks are once again witnessing strong buying, especially the stocks related to defense and shipping sectors. As India intensifies its focus on infrastructure, defense, and renewable energy, state-run enterprises are emerging as central engines of economic momentum. Public sector undertakings (PSUs) like Rail Vikas Nigam Ltd (RVNL), Hindustan Aeronautics Ltd (HAL), Bharat Dynamics Ltd (BDL), Bharat Electronics Ltd (BEL), and NHPC Ltd are benefiting from a convergence of policy support, robust order books, and sectoral leadership. Analysts remain broadly optimistic on these counters despite selective caution around valuations and execution risks.

Broader Context: Why PSUs Are Back in Favor

Macroeconomic Policy as a Catalyst: Government initiatives like the National Infrastructure Pipeline (NIP), self-reliance in defense production, and large-scale renewable energy transitions are fueling PSU momentum.

Valuation and Cash Flow Appeal: Many public enterprises trade at modest valuations relative to private peers while offering higher dividend yields, making them attractive in periods of high interest rate volatility or market uncertainty.

Strategic Leverage: PSUs like HAL and BEL have quasi-sovereign advantages in bidding, procurement, and project execution, which shields them from certain market risks and creates enduring competitive moats.

Bharat Electronics

Bharat Electronics traded between Rs 305.80 and Rs 319.45 today, indicating short-term consolidation. The Fib 61.8% level at Rs 311.01 is a critical support zone. Holding above Rs 312.60 (50% level) could signal continued upward momentum. Bulls should watch for resistance at Rs 316.23 and Rs 319.45 in the near term.

BEML

BEML witnessed action between Rs 3,116.10 and Rs 3,254.00. It is hovering near its Fib 50% retracement at Rs 3,185.05. Sustained movement above Rs 3,201.32 could trigger a move toward Rs 3,254.00. Support lies around Rs 3,168.78, below which bearish pressure may increase.

Dredging Corporation

Dredging Corporation remained in a tight range with a high of Rs 606.40 and low of Rs 585.90. Immediate support is seen near the Fib 61.8% level at Rs 593.73. Resistance is likely around Rs 598.57 and Rs 601.56. A breakout above Rs 606.40 would open space for higher levels.

Garden Reach Shipbuilders

Garden Reach Shipbuilders surged today with a high of Rs 2,019.90 and low of Rs 1,754.90. The stock is hovering near the Fib 38.2% level at Rs 1,918.67. If it sustains above this, expect upward momentum toward Rs 1,957.36. Downside support is placed near Rs 1,887.40.

Fibonacci Retracement Levels

Rail Vikas Nigam Ltd (RVNL): Infrastructure Execution at Scale

Analyst Confidence: Angel One, in its April 2025 outlook, expressed confidence in RVNL’s prospects, driven by policy continuity in infrastructure and rail modernization. The company’s ability to execute large-scale rail projects efficiently continues to be a major advantage.

Opportunities: With the government allocating significant capital for urban transit, dedicated freight corridors, and station redevelopment, RVNL stands to gain in terms of contract visibility and execution continuity.

Risks: At a price-to-earnings ratio of 47.49, RVNL’s valuations are rich, which could lead to volatility in a risk-off market. Analysts also flagged the risk of cost overruns and execution delays on mega-projects, which are inherently complex and dependent on inter-agency coordination.

Hindustan Aeronautics Ltd (HAL): Flagship of Defense Indigenization

Growth Catalysts: HAL’s robust order pipeline includes a blend of defense exports, maintenance contracts, and new orders under the “Make in India” initiative. The company’s leadership in indigenous aircraft production reinforces its strategic importance.

Analyst Sentiment: Angel One (April 2025) lauded HAL’s long-term order visibility and execution strength. Motilal Oswal (March 2025), as cited by the Economic Times, reiterated a “Buy” rating, supported by a healthy balance sheet and predictable cash flows from long-term contracts.

Strategic Edge: With India positioning itself as a regional defense exporter, HAL’s role in building platforms like the Tejas fighter and helicopters gives it both geopolitical relevance and commercial scale.

Bharat Dynamics Ltd (BDL): Missile Manufacturer with Expanding Reach

Tailwinds: BDL is capitalizing on increased defense budgets, new generation missile orders, and export-led growth opportunities. Its technological partnerships and product innovation pipeline are expected to enhance margin profile going forward.

Analyst Take: Angel One, in its latest April 2025 report, highlighted BDL’s earnings momentum and healthy order visibility. ICICI Securities, as noted by Business Standard, upgraded the stock to “Add,” citing diversification in product portfolio and a structural improvement in profitability.

Investor Watchpoint: Execution remains key, especially in complex defense programs where production delays can impact near-term earnings. But given its current momentum, the company appears well-positioned for FY26.

Bharat Electronics Ltd (BEL): Electronics Leader in Military Modernization

Policy Support: BEL is a primary beneficiary of India’s defense indigenization push, having a deep order book covering radar systems, electronic warfare platforms, and naval equipment. It also services civilian and export segments.

Analyst Viewpoint: Angel One maintains a bullish view on BEL, citing its diversified backlog and margin expansion trajectory. Kotak Securities (April 2025), as per Mint, reiterated a “Buy” rating, emphasizing strong execution and the potential for operating leverage as new contracts scale.

Positioning: With a Rs 2.3 lakh crore market cap and strategic presence across land, naval, and air domains, BEL remains one of the most stable PSU investments, especially during periods of macroeconomic stress.

NHPC Ltd: A Defensive Play with Steady Dividends

Utility Status: NHPC continues to be viewed as a low-beta stock, delivering reliable cash flows through hydroelectric power generation. The company is also gradually expanding into solar and wind, aligning with India’s clean energy ambitions.

Analyst Overview: Angel One (April 2025) recommends NHPC as a conservative holding for income-focused investors. Nomura (April 2025), reported by the Financial Express, upgraded its stance from “Reduce” to “Neutral” following improvements in project delivery and regulatory visibility.

Stability vs. Growth: While NHPC’s high capex nature caps short-term returns, it offers a strong hedge in portfolios requiring dividend income and regulatory predictability.

Market-Wide Commentary: Analysts Stay Constructive

Balanced Exposure with Sectoral Strength

From HAL’s defense dominance to NHPC’s utility-driven resilience, Indian PSUs are repositioning themselves as not just policy instruments but credible investment candidates. Their ability to deliver under state-backed capex cycles, coupled with improving governance and analyst backing, makes them vital for medium-to-long-term portfolios. Investors, however, should weigh project risk and valuation sensitivity before allocating capital, particularly in stocks like RVNL and BDL that have seen substantial run-ups.

Disclaimer: Investors are advised to conduct their own due diligence or consult with a certified financial advisor before making investment decisions.