Public Sector Undertakings (PSUs) have been a key pillar of India’s economy, contributing to growth while supporting the country’s energy, infrastructure, and industrial sectors. These government-owned companies operate across various industries, including energy, banking, utilities, and defence, playing a vital role in national development and government revenue generation. This article explores the top PSU stocks for March 2025, selected based on their 5-year CAGR, market capitalisation, and 1-year return.
Best Government Stocks in India March 2025 – Based on 5yr CAGR
Name | Market Cap (₹ in crore) | Close Price (₹) | ↓5Y CAGR (%) | 1Y Return (%) |
Rail Vikas Nigam Ltd | 77,500.20 | 371.7 | 73.56 | 42.77 |
Hindustan Aeronautics Ltd | 2,25,276.86 | 3,368.50 | 55.7 | 14.26 |
Bharat Electronics Ltd | 1,87,203.44 | 256.1 | 54.76 | 35.72 |
Bharat Dynamics Ltd | 37,008.15 | 1,009.60 | 47 | 18.77 |
Bharat Heavy Electricals Ltd | 68,391.21 | 196.41 | 41.11 | -11.49 |
Note: The best PSU stocks list provided here is as of February 24, 2025. The stocks are sorted based on their 5-year CAGR.
Overview of the Best PSU Stocks in March 2025
1.Rail Vikas Nigam Ltd
Rail Vikas Nigam Ltd (RVNL) is responsible for executing various railway infrastructure projects assigned by the Ministry of Railways (MoR), including track doubling, gauge conversion, new lines, electrification, and major bridge construction.
In the first half of FY 2025, RVNL reported a total income of ₹9,472.82 crore, down from ₹11,063.52 crore in H1 FY 2024. Its net profit also declined to ₹510.82 crore from ₹737.51 crore during the same period last year.
Key metrics:
- Return on Equity (ROE): 15.71%
- Earning per Share (EPS): ₹5.99
2. Hindustan Aeronautics Ltd
Hindustan Aeronautics Ltd (HAL) specialises in manufacturing, repairing, and maintaining aircraft and helicopters. It is a Navratna PSU under the Ministry of Defence.
In the first half of FY 2025, HAL’s total income rose to ₹11,60,255 lakh from ₹10,43,036 lakh in H1 FY 2024. The company’s net profit also increased to ₹2,94,763 lakh from ₹2,05,076 lakh during the same period last year.
Key metrics:
- ROE: 27.83%
- EPS: ₹129.35
3. Bharat Electronics Ltd
Bharat Electronics Ltd (BEL), a Navratna PSU under the Ministry of Defence, develops advanced electronic systems for the Indian Army.
In the first half of FY 2025, the company reported a turnover of ₹8,530.43 crore, a 15.83% increase from ₹7,364.82 crore in the same period last year. Its profit after tax (PAT) rose by 39.03% to ₹1,867.41 crore, compared to ₹1,343.18 crore in H1 FY 2024.
Key metrics:
- ROE: 28.55%
- EPS: ₹6.79
4. Bharat Dynamics Ltd
Bharat Dynamics Ltd (BDL), a PSU under the Ministry of Defence, specialises in manufacturing guided missile systems and related equipment for the Indian Armed Forces.
In H1 FY 2025, the company reported revenue from operations of ₹735.94 crore, down from ₹913.53 crore in H1 FY 2024. Its net profit declined to ₹129.75 crore from ₹188.91 crore during the same period last year.
Key metrics:
- ROE: 15.16%
- EPS: ₹15.43
5. Bharat Heavy Electricals Ltd
Bharat Heavy Electricals Ltd (BHEL), a leading integrated manufacturer of power plant equipment, specializes in designing, engineering, producing, installing, testing, commissioning, and servicing a wide range of products and services.
For the 9 months ending December 31, 2024, the company’s total income rose to ₹19,662.15 crore from ₹16,022.21 crore in the same period of FY 2024. The company reported a PAT of ₹29.45 crore, recovering from a loss of ₹207.40 crore in the previous year’s corresponding period.
Key metrics:
- ROE: 2.01%
- EPS: ₹1.42
Best PSU Stocks in India – Based on Market Cap
Name | ↓Market Cap (₹ in crore) |
NTPC Ltd | 3,16,353.73 |
Power Grid Corporation of India Ltd | 2,43,582.81 |
Coal India Ltd | 2,27,990.13 |
Hindustan Aeronautics Ltd | 2,25,276.86 |
Bharat Electronics Ltd | 1,87,203.44 |
Note: The best PSU stocks list provided here is as of February 24, 2025. The stocks are sorted based on their market cap.
Best PSU Stocks in India – Based on 1-year Return
Name | ↓1Y Return (%) |
Rail Vikas Nigam Ltd | 42.77 |
Bharat Electronics Ltd | 35.72 |
Bharat Dynamics Ltd | 18.77 |
Hindustan Aeronautics Ltd | 14.26 |
Indian Renewable Energy Development Agency Ltd | 6.64 |
Note: The best PSU stocks list provided here is as of February 24, 2025. The stocks are sorted based on their 1-year return.
Advantages of Investing in Top PSU Stocks
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Consistent Dividends
With government backing, PSUs maintain stable revenues, often leading to regular and dependable dividend payouts. This makes them a strong choice for investors seeking steady income.
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Government Support
PSUs benefit from government assistance, ensuring stability during economic downturns. This support includes financial aid, policy advantages, and protection from major market fluctuations.
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Strong Industry Position
Many PSUs dominate key sectors such as energy, transportation, and utilities, providing both stability and long-term growth potential.
Conclusion
PSU stocks offer reliable dividend income and potential capital appreciation. However, with numerous options available, thorough research is essential before making investment decisions.
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.