Public sector stocks are making a comeback, says Pankaj Murarka, CEO and CIO of Renaissance Investment Managers, which manages assets worth over $196 million. He believes the next leg of the rally could be led by PSU banks and oil marketing companies (OMCs) as reforms and improving fundamentals revive investor interest.

“The trigger point for PSU rallies is always the government’s reform actions,” Murarka said, pointing to recent clarity on LPG subsidy sharing and benign oil prices that have boosted OMC cash flows.

He added that renewed foreign inflows — over $10 billion into the financial sector in the past eight weeks — and talk of potential bank consolidation are also driving optimism in state-owned lenders.

Murarka said valuations across the PSU space still look attractive despite t

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