Bharat Electronics, BHEL, Dredging Corporation were among major gainers on Tuesday. Overall market sentiment has turned positive and markets could see higher levels. Today's session has witnessed selling but overall trend looks positive. Global markets have also witnessed strong rally as US and China have reduced tariffs. If Indian markets recover today, we could see strength during the week but if we see further selling, traders can expect lower levels in coming sessions. In a time of macroeconomic uncertainty and geopolitical shifts, India's PSU landscape offers both growth stories and cautionary tales. For portfolio managers and retail investors alike, the key is to stay informed, be selective, and diversify exposure across well-capitalized, policy-aligned sectors.

As India advances its infrastructure and defense agendas, key public sector undertakings (PSUs) have begun to showcase diverging trajectories. Bharat Electronics Ltd (BEL) continues to thrive under the government’s indigenization push, securing a Rs 2,210 crore electronic warfare deal. Meanwhile, Indian Railway Finance Corporation (IRFC) grapples with volatility tied to public float concerns. BEML and BHEL ride on strong order books, although valuation concerns persist. Dredging Corporation reclaims profitability, and Power Grid Corporation remains stable with consistent dividends. The following analysis highlights financial performance, technical triggers, and brokerage sentiment across these PSUs.

BEL Strengthens Grip on Defense Contracts

Bharat Electronics Ltd (BEL) has reinforced its dominance in India’s defense electronics space, having secured a Rs 2,210 crore order from the Indian Air Force to supply electronic warfare suites for Mi-17V5 helicopters. This elevates the company’s FY25 cumulative order intake to Rs 2,803 crore, underscoring its strategic alignment with India’s indigenization drive.

FY25 has also been financially fruitful for BEL, as the firm reported a 16% year-on-year revenue growth, reaching Rs 23,000 crore. With an order book swelling to Rs 74,600 crore by Q2FY25, the outlook remains solid.

Shares of BEL surged 5.3% following the announcement, marking a rare bullish session in a year otherwise marked by a 5% year-to-date decline. According to Motilal Oswal, BEL remains a “Buy” with a price target of Rs 360, supported by margin stability and robust order visibility.

CNBC TV18 analysts also identified a technical breakout, suggesting a new bullish cycle may have been triggered.

IRFC Struggles with Volatility Amid Stake Dilution Fears

Despite a sharp 7.83% rebound to Rs 125.53 on May 12, Indian Railway Finance Corporation (IRFC) remains under pressure. The stock is down 50% from its July 2024 peak of Rs 229. Investors are jittery about potential stake dilution, as 86.36% of IRFC is held by the government, which must comply with minimum public shareholding norms.

Technically, IRFC is in a bearish phase, trading below key moving averages. An RSI of 24 suggests oversold conditions.

Brokerage firm Investec remains skeptical, maintaining a “Sell” rating with a target price of Rs 50. Jigar Patel from Anand Rathi also flagged risks, suggesting a downside to Rs 90 if the stock fails to hold the Rs 115 support.

Dredging Corporation Returns to Profitability

Following three consecutive loss-making quarters, Dredging Corporation of India posted a Rs 16.06 crore profit in Q3FY25, aided by a 66% QoQ revenue surge. The stock responded positively, rising 5.34% to Rs 593.80 on May 12.

While fundamentals show signs of recovery, technical indicators remain weak. According to StockInvest.us, the stock is facing bearish momentum, with an anticipated pullback to the Rs 465–Rs 572 range.

The company's improved revenue visibility stems from coastal protection and government infrastructure projects. With a key board meeting scheduled for May 14, FY25 results could be a decisive catalyst.

BEML Rides Metro Order and Fund Interest

BEML Ltd continues to deepen its footprint in urban mobility, winning a Rs 405 crore contract from Bengaluru Metro for manufacturing and maintaining metro cars. This comes on the heels of Motilal Oswal Mutual Fund acquiring 2.66 lakh shares in the company.

Additionally, BEML announced a Rs 15 per share dividend, with the record date set for May 15.

Despite short-term bearish EMA signals flagged by Economic Times, long-term investors have reason to stay optimistic. BEML has posted a 126% return over three years. However, concerns around overvaluation persist. Smart Investing estimates an intrinsic value of Rs 1,482, suggesting the stock is priced well above its fair value.

Power Grid Maintains Stability Through Project Acquisitions

Power Grid Corporation continues to operate with reliable fundamentals, recently acquiring three transmission projects worth Rs 43.73 crore across Gujarat, Andhra Pradesh, and Rajasthan.

The company announced a Rs 3.25/share interim dividend earlier in January, further reinforcing its appeal to yield-seeking investors. On May 12, the stock climbed 3.26% to Rs 309.05, in line with Economic Times’ median target price for the company.

With a market cap of Rs 2.87 lakh crore, Power Grid remains a cornerstone of India's grid modernization initiatives and renewable energy integration.

BHEL Sees Record Orders but Technical Caution Persists

Bharat Heavy Electricals Ltd (BHEL) delivered a 19% YoY revenue jump to Rs 27,350 crore in FY25. More impressively, the firm secured record order inflows of Rs 92,534 crore, pushing its order book to a formidable Rs 1.95 lakh crore.

On May 13, shares advanced 1.16% to Rs 235.90, though the stock is still down 16% YTD. From a technical standpoint, bearish stochastic and EMA signals point to possible short-term weakness.

While JM Financial holds a “Hold” stance with a Rs 361 target, ICICI Securities is more bullish, recommending a “Buy” with a target of Rs 370, supported by expectations of a thermal power revival.

Summary of Analyst Recommendations

Here is a snapshot of key analyst ratings:

Strategic Takeaways for Investors

BEL and Power Grid remain strong long-term picks due to government-backed order inflows and consistent financials.

IRFC and BHEL present riskier short-term trades, with downside risks from stake dilution and execution delays.

BEML and Dredging Corp benefit from infrastructure tailwinds, but investors should watch valuation and technical signals.