Is the PSU party just beginning? Where to look for next leg of growth

India’s PSUs have delivered a strong turnaround since the pandemic, with FY20–25 PAT CAGR at 36%, outpacing private firms. Despite FY25 earnings consolidation, PSU banks led growth. Valuations have moderated, but fundamentals remain robust. BEL and HAL are well-positioned with strong order books and policy tailwinds, supporting double-digit earnings growth over FY25–27.