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A recent study conducted by Value Stocks, a smallcase manager, provides insight into the valuation of Public Sector Undertaking (PSU) stocks. The research firm analyzed 91 PSU stocks listed on the National Stock Exchange (NSE), categorizing them into 26 subgroups. The findings reveal that only five sub-groups are overvalued, five are fairly valued, while a significant 16 sub-groups are undervalued, indicating strong investment opportunities in the PSU sector.The report highlights specific undervalued sectors, including Iron & Steel, Housing Finance, and PSU Banks, indicating a favorable market position for investors. These sectors are currently available at attractive corrections from their recent highs, making them appealing options for those seeking value.114245392In addition to Iron & Steel and Housing Finance, the study notes that Public Sector Banks have improved their standing, with diminished concerns over governance, technology, and credit costs. As a result, they are now viewed as competitive with private banks in terms of valuation.Shailesh Saraf, smallcase manager and founder of Value Stocks, commented on the outlook for PSU banks: "We remain strong believers in PSU banks, which are much better positioned compared to their private peers in terms of valuation. The Nifty PSU Bank index is trading at a PE of 8.5, while the Nifty Private Bank Index is at 15.5 PE. We are confident about PSU stocks due to government support for infrastructure projects, energy transition, and banking sector reforms. These stocks are currently available at good corrections and should be considered promising investment opportunities."The study identifies five subgroups with overvalued valuations, including Coal, Financial Institutions, Logistics Solution Providers, Power - Transmission, and Tour and Travel Related Services.114245405he report also emphasizes that sectors such as Defence, Railways, and Shipbuilding are available at significant corrections from their recent highs, presenting lucrative investment opportunities. These sectors have demonstrated strong sales and profit growth, making them attractive options for investors at current prices.114245442For instance, Bharat Electronics and Hindustan Aeronautics boast robust order books, with over Rs 76,000 crore and Rs 94,000 crore, respectively. The report indicates that these companies are well-positioned for future growth.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)

According to data from PMS Bazaar, Pace Financial's Tresor SKG India Value Fund was the standout performer last month, delivering a 12% monthly return. Second on the list is Molecule Ventures' Quant Fund, which achieved a return of 10.28%.Other top winners include Sundaram's SISOP Fund, Emkay's Golden Decade of Growth, Wryght's Alpha Fund, and InCred's Healthcare Portfolio.Among star fund managers, Shyam Shekhar's ithought-run multi-asset fund NOP gained 5.4%, while Sphere returned 4.82%. However, his small-cap fund Vrddhi posted a negative return of 2.11% for the month.Saurabh Mukherjea-run Marcellus's financials-focused Kings of Capital and Consistent Compounders both increased by 4.5%. His midcap fund, Rising Giants, gained 2.85%, while the small-cap fund, Little Champs, underperformed benchmarks with a return of 0.46%.Sunil Singhania's Abakkus-run All Cap Approach fund rose by 2.33%, the Diversified Alpha Approach gained 2%, and Emerging Opportunities returned 0.4%.Deepak Shenoy's Capitalmind large-cap Market Fund delivered a return of 2.31%, while Samir Arora's Helios India Rising PMS fund increased by 1.86%.After ending 2.35% higher last month, the Sensex has fallen nearly 3% so far this month as foreign investors continue to sell off Indian assets amid geopolitical tensions and renewed buying interest in China.As we approach the Q2 results season, the market anticipates strong numbers from the IT and banking sectors."HCL Tech’s good results confirm the optimistic expectations and the banking results, particularly from the leading private banks, also are likely to be good. Unlike IT stocks where there is only limited valuation comfort, the banking stocks offer decent valuation comfort and, therefore, have the potential to move up from the present levels," said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.