Power Grid, NMDC, BHEL: 3 PSU Dividend Stocks Recommended To Buy On June 6, Prabhudas Sets Target

The market is set to open on Thursday with a key focus on the upcoming RBI policy outcomes which will be announced tomorrow. Also, the formation of the NDA government after their hattrick win in the 2024 election will further drive sentiments. Following this, there top three PSU dividend stocks that are recommended to buy today by Prabhudas Lilladher. These are Power Grid, NMDC, and BHEL.

1. Power Grid:

Shiju Koothupalakkal - Technical Analyst at Prabhudas Lilladher recommends buying the stock for a target of Rs 315.

Power Grid shares are currently at Rs 298.75 apiece on BSE. The stock has delivered 72.50% amounting to Rs 7.25 per share, while on current market price, it has a dividend yield of 2.43%.

POWERGRID is mainly engaged in the business of transmission of power through its EHVAC/HVDC transmission network. The company has diversified into the telecom business by leveraging its Pan India transmission network through the stringing of optical ground wire(OPGW).

2. NMDC:

Prabhudas analyst has recommended BUY for a target of Rs 267 with a stop loss of Rs 238. Currently, the stock is at Rs 245.05 on BSE.

In FY24, NMDC delivered a 575% dividend worth Rs 5.75 per share. On the CMP, it has a dividend yield of 2.35%.

Incorporated in 1958 as a Government of India public enterprise, NMDC is India's largest producer of iron ore. Since its inception, the corporation under the administrative control of the Ministry of Steel, has been involved in the exploration of a wide range of minerals including copper, rock phosphate, limestone, magnesite, diamond, tungsten and beach sands amongst others in some of the most remote corners of the country.

3. BHEL:

Koothupalakkal advised BUY for a target price of Rs 270 with a stop loss of Rs 248. BHEL paid a dividend of 12.50% valuing Rs 0.25 per share in FY24.

At present, its stock price is at Rs 255.25 apiece on BSE.

BHEL is India's largest engineering and manufacturing enterprise in the energy and infrastructure sectors. Established in 1964, the company is a leading power equipment manufacturer globally and one of the earliest and leading contributors towards building an Aatmanirbhar Bharat.

Trade Guide On June 6:

Apart from the top 3 PSU stocks for the June 6th trade, Koothupalakkal expects Nifty to find support at 22,400 and resistance around 22,900. Bank Nifty is expected to have support at 48,000 and resistance around 50,300 on Thursday.

The consensus of the market is that RBI is likely to hold rates for the eighth time in a row and at a multi-year high of 6.5% for the policy repo rate. The withdrawal of the accommodation stance is also likely to be unchanged on June 7. However, market participants will be looking for dovish remarks from RBI which could give further clarity for rate cut scenarios in the coming months.

Also, Vaibhav Porwal, Co-founder, of Dezerv said, In the current market scenario, the investors should remain cautious about investing in momentum stocks or small-cap stocks which have remained overheated over the past two years. Any sustained period of sideways or downward movement in momentum stocks can trigger a sell-off in these stocks. Investors, therefore, should consider the risk involved before making such investments."

Having said that, Porwal added that a steep fall in the market without any structural change in the fundamentals must be regarded as an opportunity. We believe that the investors should capitalise on this opportunity for fresh investments in equity.

Lastly, Porwal said, "Investors should keep in mind that a BJP-led coalition government is not necessarily bad for the economy, and this is not the first time we will see a coalition government. From 1989 to 2014, our GDP grew by more than 8% annually while a coalition government was at the Centre. What we saw in the markets yesterday was a knee-jerk reaction. As the speculative trades built around election results unwind and as clarity around the new government emerges, markets will find their ground."

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns. in advises users to consult with certified experts before making any investment decision.