Best Government Stocks in February 2025 Based on 5-Yr CAGR: RVNL, HAL, BEL & More

Government stocks in India refer to publicly traded company shares that are either owned or majorly controlled by the government. These stocks often represent industries important to the nation’s infrastructure, economy, and development, such as transportation, finance, energy, etc. In this article, check the best government stocks list in February 2025, based on the 5-yr CAGR and other parameters like market cap and net profit margin. Also, learn the pros and cons of investing in government stocks.

Best Government Stocks in India February 2025 – Based on 5yr CAGR

Note: The best government stocks list provided here is as of January 23, 2025. The stocks are sorted based on their 5-yr CAGR.

Overview of the Best Government Stocks in February 2025

1. Rail Vikas Nigam Ltd (RVNL)

Rail Vikas Nigam Ltd takes up various kinds of rail infrastructure projects assigned by the Ministry of Railways (MoR), which include doubling, gauge conversion, new lines, railway electrification, major bridges, etc. In H1 FY 2025, the company’s net profit was ₹510.82 crore, a drop from ₹737.51 crore during the same period in FY 2024.

Key metrics:

• Return on Equity (ROE): 19.69%
• Return on Capital Employed (ROCE): 17.44%

2. Hindustan Aeronautics Ltd (HAL)

Hindustan Aeronautics Ltd is engaged in the manufacturing of aircraft and helicopters and repairs and maintains them. The company is a Navaratna Status Public Sector Undertaking (PSU) under the Ministry of Defence. In FY 2024, the company’s total income was ₹32,27,768 lakh, up from ₹28,59,758 lakh in FY 2023. The profit for FY 2024 was ₹7,62,095 lakh, an increase from ₹5,82,773 lakh in FY 2023. In H1 FY 2025, the company’s net profit was ₹2,94,763 lakh, a rise from ₹2,05,076 lakh during the same period in FY 2024.

Key metrics:

• ROE: 28.91%
• ROCE: 24.58%

3. Bharat Electronics Ltd (BEL)

Bharat Electronics Ltd is a Navratna PSU under the Ministry of Defence, Government of India. BEL offers advanced electronic products for the Indian Army. In FY 2024, the company’s total income was ₹20,93,838 lakh, an increase from ₹18,01,524 lakh in FY 2023. The profit for FY 2024 was ₹3,98,524 lakh, up from ₹2,98,624 lakh in FY 2023. In H1 FY 2025, the company’s net profit was ₹1,88,406 lakh, a rise from ₹1,32,831 lakh during the same period in FY 2024.

Key metrics:

• ROCE: 30.17%
• ROE: 26.37%

4. Bharat Dynamics Ltd (BDL)

Bharat Dynamics Ltd was incorporated as a PSU under the Ministry of Defence. The company is engaged in the manufacturing base for guided missile systems and allied equipment for the Indian Armed Forces. In FY 2024, the company’s total income was ₹2,73,110.44 lakh, up from ₹2,64,479.47 lakh in FY 2023. The profit for FY 2024 was ₹61,272.06 lakh, an increase from ₹35,217.49 lakh in FY 2023. In H1 FY 2025, the company’s net profit was ₹129.75 crore, a drop from ₹188.91 crore during the same period in FY 2024.

Key metrics:

• ROCE: 11.34%
• ROE: 17.89%

5. Oil India Ltd

Oil India Ltd is involved in exploration, development and production of crude oil and natural gas, transportation of crude oil and production of LPG. It also offers various E&P-related services for oil blocks. In H1 FY 2025, the company’s total income was ₹18,464.67 crore, a rise from ₹15,778.29 crore during the same period in FY 2024. The net profit was ₹4,085.46 crore, an increase from ₹2,039.85 crore during the same period in FY 2024.

Key metrics:

• ROCE: 12.61%
• ROE: 13.41%

Best Government Stocks in India – Based on Market Cap

Note: The best government stocks list provided here is as of January 23, 2025. The stocks are sorted based on their market capitalisation.

Best Government Stocks in India – Based on Net Profit Margin

Note: The best government stocks list provided here is as of January 23, 2025. The stocks are sorted based on their net profit margin.

Benefits of Investing in Government Stocks

• Stability and Security: Government stocks are backed by the government.
• Public Sector Advantage: Government companies can benefit from government policies, contracts, and tenders, especially in the infrastructure, defence, and energy sectors.

Risks of Investing in Government Stocks

• Limited Market Flexibility: Public sector companies might have less flexibility in adapting to market conditions due to government regulations and controls.
• Political and Fiscal Policy Risk: While government stocks are generally seen as safe, changes in government policies, fiscal management, or political instability can still impact the market value of these investments.

Conclusion

Apart from the government stocks list mentioned above, there are several other companies from the state and central government. Before investing in any stock it is crucial to understand the business of the company, their financials and future outlook. Understand your investment objective and risk appetite before making a decision.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.