ONGC, NTPC, BDL, BEL and IOC Among CPSE Stocks Hitting 52-Week Lows

CPSE Stocks Face Pressure as Several Hit 52-Week Lows

The recent decline in Central Public Sector Enterprises (CPSE) stocks raises concerns about growth prospects and market performance.

Market Performance and Sector Overview

As of 10:26 AM on Thursday, the BSE CPSE index was down 1.2%, compared to a 0.51% decline in the BSE Sensex. Over the past month, the CPSE index has underperformed the broader market, dropping 7% against a 4.4% fall in the benchmark index. This underperformance highlights the growing concerns among investors regarding the growth trajectory of these public sector companies.

The BSE CPSE Index, which measures the performance of CPSEs listed on the BSE, was launched on September 29, 2014. It includes companies where 51% or more of the direct holding belongs to the Central Government of India. The recent downturn raises questions about the sustainability of growth in this sector, particularly as global economic conditions remain uncertain.

Analysts’ Outlook on Public Sector Undertakings

Analysts at ICICI Securities have expressed cautious expectations for public sector undertakings (PSUs) in the upcoming July to September 2026 quarter (Q2FY27). They anticipate that revenue growth for these companies will remain muted, ranging from flat to lower double digits, which aligns with historical trends. In contrast, private players may exhibit stronger performance, with revenue growth projected between 10% to 50% year-on-year, driven by effective execution and order backlog from previous quarters.

The brokerage firm further notes that while PSUs are expected to maintain lower double-digit revenue growth, their margins could either remain steady or contract due to input cost pressures and a challenging mix. The order book for PSUs is also likely to remain stagnant, with only marginal improvements anticipated compared to private sector players.

Challenges Facing Oil Marketing Companies

In a related sector, Elara Capital has projected significant losses for oil marketing companies (OMCs) in Q2FY27, estimating a combined loss of ₹5,900 crore, a stark contrast to the profit of ₹17,900 crore reported a year earlier. This downturn is attributed to the shift in gross marketing margins on diesel and petrol, which have turned negative, resulting in losses of ₹24/litre and ₹2/litre, respectively.

The earnings of OMCs are further pressured by the weakening Indian Rupee and rising crude oil prices. Additionally, the cessation of a ₹3,000 crore LPG subsidy support from the government, which has been in place since November 2025, could exacerbate losses unless new support measures are announced.

Earnings Performance Across Utilities

Elara Capital’s preview for Q2FY27 indicates a mixed earnings performance across its utilities coverage universe. While regulated utilities such as NTPC, NLC, Power Grid, SJVN, and NHPC are expected to report stable earnings, this stability is largely supported by assured returns on their regulated equity base. This suggests that while some segments of the public sector may fare better than others, the overall outlook remains cautious.

Key Highlights

• 13 CPSE stocks, including ONGC and NTPC, hit 52-week lows amid market concerns.
• The BSE CPSE index fell 1.3%, underperforming the broader market.
• Analysts expect muted revenue growth for PSUs in Q2FY27.
• Oil marketing companies projected to face significant losses in Q2FY27.
• Regulated utilities may report stable earnings due to assured returns.

Investor Note: The recent performance of CPSE stocks highlights the challenges facing public sector undertakings in a volatile economic environment. Investors should closely monitor sector developments and consider the implications of government policies and global market trends on these enterprises.