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Public Sector Undertakings (PSUs) have become increasingly attractive to investors, not just for their reliable dividend payouts but also for their strong capital gains. Over the past five years, the BSE PSU Index has surged nearly 250%, driven by better financial performance, efficient execution, and supportive government reforms.
What sets many PSU stocks apart is their impressive dividend yields. It is often higher than returns from bank FDs or government schemes, thereby making them ideal for income-focused investors. At the same time, their improving fundamentals have turned several into solid wealth creators.
With some of these high-potential stocks still trading below ₹400, they offer a compelling opportunity for retail investors seeking a mix of stability, income, and long-term growth. In this article, we spotlight the top PSU stocks to consider for September 2025.
| Name | Ticker | Sub-Sector | Market Cap (₹ Cr) | 5Y CAGR (%) | 6M Return (%) |
| Rail Vikas Nigam Ltd | RVNL | Specialised Finance | 65,217.93 | 70.11 | -10.67 |
| Garden Reach Shipbuilders & Engineers Ltd | GRSE | Shipbuilding | 27,777.94 | 62.39 | 85.07 |
| Cochin Shipyard Ltd | COCHINSHIP | Shipbuilding | 43,208.06 | 55.34 | 26.79 |
| Steel Authority of India Ltd | SAIL | Iron & Steel | 49,556.23 | 23.68 | 13.17 |
| Power Grid Corporation of India Ltd | POWERGRID | Power Transmission & Distribution | 2,60,401.18 | 21.84 | 9.23 |
RVNL is a government-owned PSU with the Government of India holding a 72.84% stake as of March 31, 2023. Over the past five years, RVNL's debt-to-equity ratio has been 84.99%, significantly lower than the industry average of 666.59%.
Recently, RVNL formed a joint venture with Texmaco Rail & Engineering Ltd to enhance India's railway modernization and export capabilities. This JV will focus on manufacturing rolling stock, including wagons, locomotives, coaches, and metro coaches, and explore automation, AI, and green technologies.
Key Metrics:
GRSE boasts a ₹21,700 crore order book, with 98% from shipbuilding. It delivered its first P-17A stealth frigate ahead of schedule and crossed ₹5,000 crore revenue and ₹500 crore profit after tax last year. GRSE plans to expand shipbuilding capacity from 28 to 40 ships by 2029, acquire a dry dock, and develop two greenfield shipyards. With 86% defence orders and upcoming ₹25,000 crore corvette contracts, GRSE is positioned for strong future growth.
Key Metrics:
CSL, India’s largest shipbuilding and repair firm, reported strong Q1 FY26 growth with a ₹21,100 crore order book and a massive ₹2.85 lakh crore pipeline. It delivered electric-hybrid vessels, secured new contracts, and expanded international partnerships. CSL’s upgraded dry dock now handles large vessels, boosting global capabilities. Q1 revenue rose 38% to ₹1,068.6 crore, with steady margins and a strong balance sheet. With 65% defence orders and a sustainability focus, CSL is poised for long-term growth.
Key Metrics:
SAIL reported a robust Q1 FY26 performance, with a 273% jump in profit before exceptional items and tax to ₹890 crore. The company produced 4.85 million tonnes of crude steel and sold 4.55 million tonnes, generating ₹25,921 crore in revenue and ₹2,925 crore in EBITDA.
In support of India’s defence self-reliance, SAIL supplied around 8,000 tonnes of critical-grade steel for the Indian Navy’s advanced stealth frigates INS Udaygiri and INS Himgiri under Project 17A.
Key Metrics:
Powergrid is the country’s leading electric power transmission company, operating 90% of India’s interstate network. It handles bulk power transmission, smart grid solutions, and offers consultancy and telecom services.
Recently, it secured a transmission project in Karnataka under competitive bidding and approved a ₹30,000 crore fundraising plan for FY 2026-27. Additionally, it greenlit a ₹209 crore investment for the North-Eastern Region Expansion Scheme, enhancing infrastructure to support renewable integration and regional connectivity.
Key Metrics:
Read more: PM 15000 Scheme: Who Can Apply For PM Viksit Bharat Yojana?
PSUs like GRSE, Cochin Shipyard, RVNL, SAIL, and Power Grid continue to stand out for their strong financials, attractive dividends, and long-term growth potential. With some still trading under ₹400, they offer compelling opportunities for retail investors seeking a mix of stability and wealth creation.
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.
Published on: Aug 28, 2025, 4:44 PM IST
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