Calendar 2016 brought in some joyful moments for investors of the so-called Maharatna companies, as they are on course to outpace the benchmark equity indices for the first time in five years.
The elite club of Maharatnas has some solid names in its ranks, including the country’s leading downstream player IndianOil, upstream oil giant ONGCBSE -1.40 %, power equipment maker BHEL, steel behemoth SAIL, mining biggie Coal India, power giant NPTC and gas transmission and marketing company GAIL (India).
On an average, these seven companies have delivered nearly 11 per cent return in 2016, whereas BSE Sensex is on course to end the year almost flat.
Among the top gainers, IOC has rallied 44.22 per cent on a year-to-date basis, followed by ONGC (up 21.47 per cent), GAIL (up 15.37 per cent), NTPCBSE -0.78 % (up 10.88 per cent) and SAIL (up 2.79 per cent).
However, BHEL and Coal India slipped 29.24 per cent and 12.20 per cent, respectively, in 2016 so far. Market experts continue to be bullish on IOC, GAIL, ONGC and NTPC even for the next few quarters.
During the previous calendar year, shares of the Maharatna companies slipped 15 per cent on an average compared with a 5 per cent fall in the benchmark Sensex.
Shares of these seven public sector companies delivered an average return of 29.33 per cent in 2014, when the Sensex advanced nearly 30 per cent.
In 2013, the Maharatna stocks again slipped nearly 13 per cent against a 9 per cent surge in the 30-share benchmark index. These seven companies gave an average return of 3.68 per cent in 2012 against 25.70 per cent return given by the benchmark equity index.
A listed Navratna company is called Maharatna if its average turnover, annual net worth and profit after tax is more than Rs 25,000 crore, Rs 15,000 crore and Rs 5,000 crore, respectively, in last three years with significant global presence.
For the half year ended September 30, 2016, the average net profit of the Maharatna firms surged 16.36 per cent on a year-on-year basis, while top line slipped by 7.47 per cent.