Are Gujarat PSU stocks a good bet?

Views on Gujarat PSU stocks

COMPANY ANALYSIS

RTI For Money

4/27/20231 min read

gujarat psu stocks
gujarat psu stocks

Gujarat PSU stocks rose by 7 to 20 percent on the news that the Gujarat government had passed new rules related to dividend and bonus shares.

Stocks that rose were GMDC,GFSC,GNFC,GSPL and Gujarat Alkali. According to the rules these PSU companies will have to pay minimum 30% of PAT as dividend or 5% of net worth, whichever is larger.

GSFC

PAT FY2022 : 898.60 CR -> 30% OF PAT = 270 CR APPROX

NET WORTH : 11773.77 CR -> 5% OF NET WORTH = 588 CR APPROX

The above translates to minimum dividend of 14 rupees. CMP = 153. Hence dividend yield = 9%.

GNFC

PAT FY2022 : 1710.41 CR -> 30% OF PAT = 513 CR APPROX

NET WORTH : 7990.03 CR -> 5% OF NET WORTH = 400 CR APPROX

The above translates to minimum dividend of 33 rupees. CMP = 587. Hence dividend yield = 5.6%.

GMDC

PAT FY2022 : 405 CR -> 30% OF PAT = 121.5 CR APPROX

NET WORTH : 4766.75 CR -> 5% OF NET WORTH = 238 CR APPROX

The above translates to minimum dividend of 7.5 rupees. CMP = 159.7. Hence dividend yield = 4.7%.

CONCLUSION

Based on dividend yield GSFC seems to be the best bet.

GSPL seems to be the best bet based on fundamentals and technicals.