Best Government Stocks in India October 2024 – Based on 5yr CAGR

Government stocks are shares of companies that are owned or controlled by the government. In India, government stocks are often considered to be relatively safe and low-risk investments. This is due to the government’s ownership and the strategic importance of the areas in which these companies operate. However, like any other stocks, government stocks are still subject to market changes and other risks. In this article, we have listed some of the best government stocks in India for October 2024, based on their 5-yr CAGR.

List of the Best Government Stocks in October 2024 – Based on 5yr CAGR

Note: The best government sector stocks list provided here is as of September 27, 2024. The stocks are sorted based on their 5-yr CAGR.

Overview of the Best Government Stocks in October 2024

• Rail Vikas Nigam Ltd

Rail Vikas Nigam Ltd (RVNL) undertakes different types of rail infrastructure projects assigned by MoR, including doubling, gauge conversion, new lines, railway electrification, major bridges, etc. In FY 2024, the company’s total income reached ₹22,915.13 crore, up from ₹21,285.51 crore in FY 2023. The profit for FY 2024 was ₹1,462.95 crore, an increase from ₹1,267.97 crore in FY 2023. 

Key metrics:

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

• Hindustan Aeronautics Ltd

Hindustan Aeronautics Ltd (HAL) is involved 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 reached ₹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.

Key metrics:

• ROE: 28.91%
• ROCE: 24.58%

• Bharat Electronics Ltd

Bharat Electronics Ltd (BEL) is a Navratna PSU under the Ministry of Defence, Government of India. BEL produces advanced electronic products for the Indian Army. In FY 2024, the company’s total income reached ₹20,93,838 lakh, up from ₹18,01,524 lakh in FY 2023. The profit for FY 2024 was ₹3,98,524 lakh, an increase from ₹2,98,624 lakh in FY 2023.

Key metrics:

• ROCE: 30.17%
• ROE: 26.37%

• Bharat Dynamics Ltd

Bharat Dynamics Ltd (BDL) was established as a PSU under the Ministry of Defence. The company is involved in the manufacturing base for guided missile systems and allied equipment for the Indian Armed Forces. In FY 2024, the company’s total income reached ₹2,73,110.44 lakh, up from ₹2,64,479.47 lakh in FY 2023. The profit for FY 2024 was ₹61,272.08 lakh, an increase from ₹35,217.49 lakh in FY 2023.

Key metrics:

• ROCE: 11.34%
• ROE: 17.89%

• Oil India Ltd

Oil India Limited (OIL) is a comprehensive exploration and production company and holds the Maharatna status as a state-owned enterprise under the Government of India. The company operates under the administrative oversight of the Ministry of Petroleum and Natural Gas and is the 2nd largest national oil and gas company in India. In FY 2024, the company’s total income reached ₹37,646.48 crore, compared to ₹41,758.29 crore in FY 2023. The profit for FY 2024 was ₹6,980.45 crore, compared to ₹9,854.39 crore in FY 2023.

Key metrics:

• ROE: 13.41%
• ROCE: 12.61%

Pros of Investing in the Government Stocks

• Stability and Security: Government stocks, often issued by central or state-owned enterprises, are considered safe investments due to the backing of the government, which reduces the risk of default.
• Regular Income: Many government stocks provide steady dividends, offering a reliable income stream for investors.
• Liquidity: Government stocks are generally liquid, meaning they can be easily bought and sold in the market, providing flexibility to investors.

Risks of Investing in the Government Stocks

• Political Risk: Changes in government policies or political instability can negatively impact the performance of government stocks.
• Dependence on Government Performance: The performance of government stocks is closely tied to the overall health of the government and its fiscal policies, making them susceptible to broader economic challenges.

Conclusion

In addition to these Indian government stocks, there are several other government companies listed on the stock exchanges. It’s crucial to conduct thorough research on each company’s operations, financial health, and growth potential before making any investment decisions. Assessing your own investment goals and risk tolerance is equally important, as it ensures that your choices align with your financial strategy. 

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.