Best PSU Stocks in July 2025: Rail Vikas Nigam, Garden Reach & More Based on 5-Yr CAGR

India’s Public Sector Undertakings (PSUs) have undergone notable transformation in recent years, aligning more closely with global benchmarks. Their role has been instrumental in India’s rise on the Global Innovation Index—from rank 81 in 2014 to 40 today. As PSUs continue to operate across critical sectors, their market performance remains a subject of investor and policy interest.

With their continued strong fundamentals and crucial role in nation-building, let’s explore the best PSU stocks in June 2025 based on 5 year CAGR.

Best Government Stocks in India July 2025 - Based on 5yr CAGR

Note: The best PSU stocks list provided here is as of June 26, 2025. The stocks are sorted based on their 5-yr CAGR.

Overview of the Best PSU Stocks in June 2025

1. Rail Vikas Nigam Ltd (RVNL)

RVNL is actively expanding its portfolio by venturing into international assignments and small-scale nuclear projects. Recently, the company secured significant contracts, such as a ₹156.35 crore order from South Western Railway and a ₹729.82 crore project from HPSEBL for infrastructure development in Himachal Pradesh.

In Q4 FY25, RVNL posted a consolidated net profit of ₹459.15 crore, reflecting a 4% decline from ₹478.56 crore in Q4 FY24. Nevertheless, it remains a key player in enhancing India's rail and infrastructure landscape.

Key Metrics:

• Return on Equity (ROE): 19.69%
• Return on Capital Employed (ROCE): 14.57%

2. Garden Reach Shipbuilders & Engineers

Garden Reach Shipbuilders & Engineers (GRSE) reported 118.9% year-on-year (YoY) jump in net profit, reaching ₹244.2 crore for the quarter ending March 31, 2025, compared to ₹111.6 crore in the same period last year.

The state-owned enterprise also signed a new agreement with the Geological Survey of India (GSI) to construct two coastal research vessels (CRVs). These vessels will support GSI’s geoscientific exploration along the coastline, enhancing GRSE’s research vessel capabilities and strengthening its order book.

Key Metrics:

• ROE: 23.14%
• ROCE: 39.74%

3. Bharat Electronics

Navratna defence PSU Bharat Electronics Limited (BEL) posted a 15% year-on-year (YoY) increase in net profit, reaching ₹2,127 crore for Q4 FY25, up from ₹1,796.67 crore in the same quarter last year.

The company's strong performance is supported by a mix of factors, including anticipated emergency procurement orders, a focused indigenisation drive, advancements in in-house technology, and a diversified business portfolio. These elements continue to strengthen BEL’s position in India’s defence manufacturing ecosystem.

Key Metrics:

• ROE: 26.37%
• ROCE: 40.63%

4. Cochin Shipyard

Cochin Shipyard Ltd reported an 11% year-on-year (YoY) rise in consolidated net profit, reaching ₹287 crore in Q4 FY25, up from ₹259 crore in the same period last year. The company also saw a significant boost in revenue during the quarter.

Adding to its momentum, its wholly owned subsidiary, Hooghly Cochin Shipyard Limited (Hooghly CSL), secured a major order valued between ₹100 crore and ₹250 crore for the construction of luxury river cruise vessels.

Key Metrics:

• ROE: 16.61%
• ROCE: 21.08%

5. Bharat Dynamics Ltd

In Q4 FY25, Bharat Dynamics Ltd (BDL) reported a 5.54% decline in net profit, standing at ₹272.77 crore, compared to the same period last year. Despite this dip in profitability, the company’s operational performance was robust, with revenue from operations more than doubling — rising by 108.05% to ₹1,776.98 crore.

Earlier in March 2025, the Miniratna defence PSU made headlines after securing a major contract worth ₹4,362.23 crore from the Ministry of Defence.

Key Metrics:

• ROE: 17.89%
• ROCE: 10.25%

Best PSU Stocks in July 2025 - Based on Net Profit Margin

Here’s a look at the top-performing PSU stocks in July 2025, ranked by their impressive net profit margins, showcasing their strong profitability and financial health.

Note: The best PSU stocks list provided here is as of June 26, 2025. The stocks are sorted based on their net profit margin.

Best PSU Stocks in July 2025 - Based on Low Debt to Equity

Below are the leading PSU stocks in July 2025, selected for their low debt-to-equity ratios, reflecting their strong financial stability and prudent management.

Note: The best PSU stocks list provided here is as of June 26, 2025. The stocks are sorted based on their low debt to equity.

Read More: Best Water Managment Stocks in July 2025: Denta Water, Va Tech Wabag & More Based on 5-Yr CAGR, Market Cap.

Conclusion

Companies such as Bharat Electronics, Rail Vikas Nigam, and Cochin Shipyard highlight the evolving performance of PSUs across diverse sectors, including defence, infrastructure, and engineering.

While these trends suggest improving operational efficiency and market competitiveness, investor decisions should be based on individual financial goals, risk appetite, and thorough research. PSU stocks remain a significant part of India's economic landscape, and their ongoing transformation may offer both opportunities and challenges in the long term.

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.