Top shares to buy: In chat with Anil Singhvi, Siddharth Sedani expects these PSU stocks to give bumper returns

In a special edition of the SID KI SIP show, the market analyst Siddharth Sedani while speaking to Zee Business Managing Editor Anil Singhvi has come up with Potential PSUs for the investors. He urges investors to add these government-owned stocks in their portfolio for bumper returns. 

The market analyst says, the public sector unit stocks are cheap than their peers in the private sector, moreover, the government has set a divestment target of Rs 1.75 lakh crore in FY22, in addition, the credit growth of these companies would also increase from here. 

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He adds, the government in Budget 2021 has given more importance to infrastructure improvement in its capital expenditure outlook, and there is huge growth in the oil and gas segment among others. 

Sedani says, out of 100 per cent portfolio allocation, BPCL, an oil marketing company and ONGC, crude refining and gas extracting company should be given 30 per cent each, while India’s third-largest lender Bank of Baroda, and a fertiliser company GSFC should be given 20 per cent each. 

SID की SIP- Siddharth Investment Portfolio

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BPCL: (Bharat Petroleum Corporation Limited)  

The analyst sets a target of Rs 512 per cent and expects returns of 14 per cent on a long-term basis. It has a CAPEX of Rs 10,000 crore and strong LPG (Liquid Petroleum Gas) business, the government has decided to divest some stakes in BPCL in the current financial year. 

BPCL is currently trading one per cent down at Rs 444 per share on the BSE intraday on Wednesday. 

BoB: (Bank of Baroda) 

Sedani predicts there is a sequential pick-up in the loan book of Bank of Baroda. He sets a target of Rs 95 per share with a stop-loss of Rs 62 per share, and expects the stock to grow by 23 per cent on a long-term basis. Sedani picks this PSU stock considering cheap valuations and good fundamentals. 

The stock is presently trading flat at Rs 77 per share on the BSE intraday on Wednesday.

ONGC: (Oil and Natural Gas Corporation) 

The biggest crude company in India with a 15 per cent refining business, Sedani sets a target of Rs 146 per share and stop-loss of Rs 98 per share. He expects the company to give 26 per cent returns in the coming months. An increase in international crude price would boost the company's growth substantially. 

ONGC is currently trading over 1.5 per cent down at Rs 114 per share on the BSE intraday on Wednesday.

GSFC: (Gujarat State Fertilizers & Chemicals) 

 A fertiliser and chemical state-owned company is financially strong, says Sedani, setting a target of Rs 150 per share and expects a 27 per cent return. Sedani says, the fertiliser demand in the country will grow by 10 per cent going forward. The company produces a chemical product Caprolactam, on which if anti-dumping duty comes into effect then it will be beneficial for GSFC, adds Sedani. 

The current market price of GSFC is at Rs 119 per share, down 0.3 per cent on the BSE intraday on Wednesday.