NTPC Green Energy, BEML, IREDA, Engineers India, Power Finance Corporation, REC, Garden Reach Shipbuilders and Bharat Electronics were among major gainers in the public sector on Friday. NSE Nifty closed 1.3 percent higher and the sentiment was positive. NSE Nifty managed to close above psychological 25,000 levels after a long time. But, entry of US in the Israel-Iran conflict can lead to higher volatility in the global markets on Monday. Investors and market players can expect selling pressure in high risk assets and rising gold and crude oil prices during the week. However, we can also expect recovery in the Indian markets if global sentiment improves.

India’s PSU Powerhouses Surge after Weak start for year 2025

The public sector undertakings (PSUs) are not just holding ground in the recent weeks—some of them have witnessed strong recovery from lows seen couple of months ago. From defense to renewables and finance, heavyweight counters like BEML, NTPC Green Energy, PFC, REC, GRSE, and BEL are rewriting expectations for long term investors. Some of these stocks have also attracted institutional investors in the recent weeks. A favorable macroeconomic backdrop, supportive regulatory moves, and robust order books are adding fuel to the rally. Yet, even amid optimism, a few analysts are cautioning against overvaluation, prompting nuanced perspectives across the financial spectrum.

BEML: Momentum Strong, But Valuation Lights Flashing Red

Bharat Earth Movers Limited (BEML) has delivered eye-catching returns in 2025. On June 20, the stock surged by 8.21% to Rs. 4,639.50, pushing its one-week gain to 7.83%, one-month rally to 30.51%, and three-month return to a staggering 69.09%. Over the last five years, BEML’s value has skyrocketed nearly 790%.

Fueling this meteoric rise is a robust order book of Rs. 15,139 crore, with Rs. 14,610 crore likely to be executed in FY25. The FY25 financials aligned with this narrative—revenues stood at Rs. 4,050 crore, and net profit climbed 3.8% to Rs. 293 crore. The EPS reached Rs. 70.24, with both revenue and EPS surpassing analyst estimates by 1.6% and 9.4%, respectively.

Yet, caution emerges in valuation. Trading at a lofty P/E of 61.5, BEML sits well above its historical average. While Trendlyne's consensus maintains a “BUY” stance, the average target of Rs. 3,838 implies a downside from current levels. In contrast, technical voices like Nilesh Jain of Centrum Broking see further upside to Rs. 4,800, and Bonanza’s Drumil Vithlani sets a bullish short-term target at Rs. 4,936.

NTPC Green Energy: High-Growth Green Play, But Watch the Valuation

NTPC Green Energy, a renewables-focused NTPC subsidiary, has experienced a 6.01% price surge to Rs. 110.26 as of June 20. This follows a volatile 2025 where the stock dropped 16% earlier, bottoming out at Rs. 84.60 in March. Now boasting a market capitalization of Rs. 1.24 lakh crore, the company is building on solid fundamentals.

Highlights include a recently commissioned 110.25 MW solar project, pushing NTPC Group’s installed capacity to 80,265 MW. Additionally, FTSE Index inclusion is anticipated to increase institutional inflows.

Financials remain striking: FY23–24 saw revenue soar by 1,049.82% and profits by 112.38%. However, NTPC Green trades at a sky-high P/E of 335.8 and P/B of 6.89—metrics that leave analysts cautious.

Ventura Securities sets a near-term target of Rs. 150, while Motilal Oswal pegs it slightly higher at Rs. 160, suggesting profit booking between Rs. 150–160 is prudent. Sentiment remains mixed, with analysts split evenly between buy and sell ratings.

Power Finance Corporation (PFC): Undervalued Growth with Regulatory Tailwinds

PFC caught fire on June 20, rallying nearly 6% to Rs. 412 after the Reserve Bank of India relaxed provisioning norms for under-construction infrastructure assets. This pivotal regulatory change unlocks capital for lenders and favors aggressive infrastructure lending.

Quarterly earnings reflect strength—robust loan growth, income, and profitability all beat market expectations. For FY26, PFC targets 10–11% loan book growth, underpinned by analyst forecasts of a sustainable ROE between 18–19%. A generous dividend yield of 3.84% adds to investor appeal.

Valuation is compelling. PFC trades at a P/E of 5.91 and P/B of 1.15, both well below sector averages. Analysts are broadly bullish:

Macquarie: Outperform, target Rs. 660

Bernstein: Outperform, target Rs. 525

Motilal Oswal: Buy, target Rs. 485

Emkay Global: Buy, target Rs. 500

Twelve out of 12 brokerages tracked recommend a "Buy."

REC Limited: Technical Signals Mixed, Long-Term Thesis Intact

REC, another key player in infrastructure finance, is showing signs of resurgence after a technical pivot on June 19, gaining 2.96%. The stock trades near Rs. 402, with support at Rs. 394.40 and resistance at Rs. 396.99 and Rs. 403.52.

Despite recent price strength, moving averages suggest caution. However, Macquarie remains optimistic, naming REC its top infrastructure pick for 2025 with a target price of Rs. 700, suggesting a potential upside of over 70%.

Backed by regulatory easing and a capital-light financing model, REC remains an attractive choice for long-term investors looking at India’s infrastructure cycle.

Garden Reach Shipbuilders (GRSE): Breakout Rally Meets Analyst Caution

GRSE has been one of 2025’s breakout stories. The stock soared 157% from March lows of Rs. 1,180.10 to trade well above Rs. 3,200. Remarkably, the company is now debt-free and logged 30.74% QoQ revenue growth in Q4 FY25—the highest in three years.

The stock has returned 132.51% in three months and nearly 1,000% over three years, powered by India’s defense spending and orders in commercial shipbuilding.

Yet, not everyone is convinced. Elara Capital recently downgraded GRSE from “Accumulate” to “Sell,” citing that growth may peak by FY27. Despite a robust order book, some believe the current valuation leaves little room for upside.

Bharat Electronics Limited (BEL): Long-Term Growth Engine with Broad Buy Consensus

BEL’s fundamentals remain pristine. The stock has appreciated 21% in a month, with shares trading at Rs. 319.45 as of June 20. Its order backlog of Rs. 71,650 crore—equivalent to 3.5 times FY24 sales—provides multi-year visibility.

In Q3 FY25, revenues rose by 25% to Rs. 5,770.7 crore, and net profit jumped 20% to Rs. 1,311 crore. For FY26, management guides for 15% revenue growth and 27% EBITDA margins.

Brokerage ratings remain uniformly bullish:

JP Morgan: Overweight, target Rs. 445

Antique: Buy, target Rs. 376

Nuvama: Target Rs. 385

Motilal Oswal: Target Rs. 360

24 of 28 analysts currently rate BEL a “Buy.” The company is actively diversifying its revenue, aiming for 30% from non-defense sectors by FY30 and 10% from exports.

Strategic Takeaways: Opportunities and Risks

Here’s a consolidated view of analyst targets and perspectives:

Momentum Meets Mixed Valuation Signals

Across the board, India’s PSU sector is demonstrating unmatched momentum in 2025. BEML and GRSE have turned in spectacular gains, but valuations warrant a tempered view. NTPC Green shines with renewables-led optimism but trades at stretched multiples.

On the other end, PFC and REC present compelling value opportunities with strong growth catalysts, making them favorites for risk-calibrated investors. BEL stands tall with structural tailwinds, a pipeline of government defense orders, and expansion into export markets.