Cash flow of the listed PSUs surge to 34 billion
Top gainers (Photo: PTI)
Mumbai: There are unmistakable signs of a turnaround in the economy specially led by the public sector with the cash flow of the listed PSUs surging 28 per cent to $34billion, a historic high.
In the case of PSU banks too, the top three public sector banks, namely BoB, SBI and PNB are expected to see better offtake of credit growth compared to the private sector to whom they had lost market share in the last four years.
Highlighting the trends in India Inc’s capital expenditure, Deutsche Bank’s market research report on Indian infrastructure sector says in FY15, the $34.9 billion cash flows of listed PSUs could drive fresh capex of outlined $60 billion of large projects over FY16-18; (b) aggregate cash flows for 60-odd sector names have shown a turnaround across most segments (barring E&C); (c) new mine clearances are at a record-high.
“Coal India, Cummins India, Shree Cement and Gujarat Pipavav Port are our clear frontline winners to participate in the improvement being seen on the ground, alongside L&T, BHEL, Ultra Tech and Concor,” it said. The top three of the top six public sector banks are expected to have an edge when credit growth takes off said, Jaspreet Singh Arora, head research institutional equity, Systematix Shares and Stock Brokers.
Between them, the six banks have 70 per cent market share of PSU banks. “We have a positive view on PSBs due to benefits from a bottoming credit growth; expected higher treasury gains and asset quality improvement,” the report said.
Credit growth is expected to improve 12.7 per cent and 14.9 per cent in FY16 and FY17 respectively against 11.3 per cent in FY15 on the back of government’s recent policy reforms.
The incremental credit growth is expected to be mainly contributed by PSBs at 64 per cent and 69 per cent in FY16/FY17 against 56 per cent in FY15, while that of private banks at 26 per cent and 21 respectively against 33 per cent in FY15.
( Source : deccan chronicle )
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