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

Government stocks, also known as public sector stocks, represent shares of companies in which the Indian government holds a significant stake. These stocks span various industries, including banking, energy, infrastructure, and defense, often benefiting from policy support, stable cash flows, and strategic importance to the economy. In this article, find the best government stocks in April 2025, based on the 5-yr CAGR and other parameters like net profit margin and return on investment. 

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

Note: The best government stocks list provided here is as of April 3, 2025. The stocks selected are of positive 1-yr returns and sorted based on their 5-yr CAGR.

Overview of the Best Government Stocks in April 2025

1. Rail Vikas Nigam Ltd

Rail Vikas Nigam Ltd (RVNL) undertakes a range of rail infrastructure projects entrusted by the Ministry of Railways (MoR). For the nine months ended FY 2025, the company reported a total income of ₹14,308.89 crore, down from ₹16,080.49 crore in the same period of FY 2024. Its net profit also declined to ₹822.41 crore from ₹1,096.08 crore year-on-year.

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 9M ended FY 2025, the company’s total income was ₹19,19,126 lakh, a rise from ₹16,95,162 lakh during the same period in FY 2024. The net profit was ₹4,38,742 lakh in 9M ended FY 2025, a rise from ₹3,31,227 lakh YoY. 

Key metrics:

• ROE: 28.91%
• ROCE: 24.58%

3. Bharat Dynamics Ltd (BDL)

Bharat Dynamics Ltd is into the manufacturing base for guided missile systems and allied equipment for the Indian Armed Forces. In 9M ended FY 2025, the company’s total income was ₹1,61,890.83 lakh, an increase from ₹1,78,849.59 lakh during the same period in FY 2024. The net profit was ₹27,687.33 lakh, a decline from ₹32,334.42  lakh during the same period in FY 2024.

Key metrics:

• ROCE: 11.34%
• ROE: 17.89%

4. Bharat Electronics Ltd (BEL)

BEL is a Navratna PSU under the Ministry of Defence, Government of India. The company offers advanced electronic products for the Indian Army. BEL has achieved a total income of ₹15,16,688 lakh, marking a growth in the 9M ended FY 25, compared to ₹12,14,887 lakh during the same period last year. The PAT for the 9M of FY 25 stood at ₹3,19,566 lakh, reflecting a growth from ₹2,18,857 lakh recorded in the corresponding period of the previous year.

Key metrics:

• ROCE: 30.17%
• ROE: 26.37%

5. NTPC Ltd

NTPC (National Thermal Power Corporation) Ltd primarily focuses on generating and selling bulk power to state power utilities. The group also engages in consultancy, project management and supervision, energy trading, oil and gas exploration, and coal mining. In 9M ended FY 2025, the company’s total income was ₹1,39,777.40 crore, a rise from ₹1,32,349.31 crore during the same period in FY 2024. The net profit was ₹16,056.01 crore, an increase from ₹14,842.40 crore during the same period in FY 2024.

Key metrics:

• ROCE: 10.63%
• ROE: 13.17%

Best PSU Stocks in India in April 2025 – Based on Net Profit Margin

Note: The best government stocks list provided here is as of April 3, 2025. The stocks are sorted based on their net profit margin.

Best PSU Stocks in India in April 2025 – Based on Return on Investment

Note: The best government stocks list provided here is as of April 3, 2025. The stocks are sorted based on their return on investment.

Pros of Investing in Government Stocks

• Stability: Government stocks can be considered safer due to government ownership and support, reducing default risks.
• Consistent Dividends: Many government companies, especially in sectors like energy and finance, offer regular dividend payouts.
• Long-Term Growth Potential: Infrastructure, energy, and defense PSUs often benefit from government policies and long-term projects.
• Monopoly or Market Dominance: Some government-owned companies hold dominant positions in their industries.

Cons of Investing in Government Stocks

• Government Influence: Policies, disinvestment, or political decisions can impact business operations and stock performance.
• Limited Innovation: Compared to private players, PSUs may lag in adopting new technologies or business models.

Conclusion

Apart from the government stocks listed above, there are several other companies owned by state and central governments. Before investing, it is crucial to analyse the company’s business, financials, and growth prospects. Always assess your investment goals and risk tolerance 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.