Public Sector Undertakings (PSUs) are a vital part of India’s economy, operating across key sectors such as defence manufacturing, infrastructure, banking, metals, and energy.
In the past few years, PSU companies have attracted strong investor attention thanks to improved corporate governance, robust order pipelines, and ongoing government backing. Major initiatives focused on infrastructure expansion, defence self-reliance, and energy security have further boosted the long-term prospects of many PSU businesses.
As a result, several PSU stocks have delivered strong long-term returns and continue to hold an important position in the Indian stock market.
In this article, we highlight some of the top PSU stocks in India for May 2026, ranked by their 5-year CAGR performance.
| Name | Market Cap (₹ Cr) | 1Y Return (%) | Return on Equity (%) | 5Y CAGR (%) |
|---|---|---|---|---|
| Mazagon Dock Shipbuilders Ltd | 1,06,226.09 | -15.04 | 34.03 | 90.49 |
| Garden Reach Shipbuilders & Engineers Ltd | 33,407.95 | 51.12 | 28.11 | 75.62 |
| Rail Vikas Nigam Ltd | 62,644.43 | -15.28 | 14.01 | 60.40 |
| Hindustan Aeronautics Ltd | 3,08,332.03 | 0.43 | 26.09 | 56.94 |
| Bharat Electronics Ltd | 3,16,769.27 | 37.44 | 29.29 | 56.64 |
Note: The list of best PSU stocks for May 2026 is based on available data as of May 07, 2026 and sorted by 5 year CAGR.
Founded in 1954, Bharat Electronics Limited develops advanced electronic systems primarily for the defence sector and is steadily expanding into civilian markets as well. The company spent about ₹650 crore on capex in FY24 and plans to invest ₹800 crore in FY25. It also focuses strongly on innovation, allocating around 6–7% of its revenue to R&D and holding 1,199 intellectual property rights.
Key Metrics:
ROCE: 38.9%
ROE: 29.2%
Hindustan Aeronautics Limited manufactures aircraft and helicopters and also offers repair, maintenance, and overhaul services for aviation equipment.
Key Metrics:
ROCE: 33.9%
ROE: 26.1%
Established in 1981, National Aluminium Company Limited produces and sells alumina and aluminium. It operates one of India’s largest integrated complexes, covering the entire value chain from bauxite mining and alumina refining to aluminium smelting and power generation. The company is globally recognised for its cost-efficient production of bauxite and alumina.
Key Metrics:
ROCE: 44.0%
ROE: 32.7%
| Name | Market Cap (₹ Cr) | Return on Equity (%) | 5Y CAGR (%) |
|---|---|---|---|
| Coal India Ltd | 2,91,250.54 | 38.53 | 28.83 |
| Indian Railway Catering and Tourism Corporation Ltd | 45,528.00 | 38.15 | 10.55 |
| Mazagon Dock Shipbuilders Ltd | 1,06,226.09 | 34.03 | 90.49 |
| National Aluminium Co Ltd | 75,963.09 | 32.73 | 44.04 |
| Bharat Electronics Ltd | 3,16,769.27 | 29.29 | 56.64 |
Note: The list of best PSU stocks for May 2026 is based on available data as of May 07, 2026 and sorted by ROE.
| Name | Market Cap (₹ Cr) | Return on Equity (%) | 5Y CAGR (%) |
|---|---|---|---|
| State Bank of India | 9,78,353.16 | 16.58 | 24.43 |
| NTPC Ltd | 3,86,557.60 | 13.15 | 30.86 |
| Oil and Natural Gas Corporation Ltd | 3,64,765.20 | 9.87 | 21.15 |
| Bharat Electronics Ltd | 3,16,769.27 | 29.29 | 56.64 |
| Hindustan Aeronautics Ltd | 3,08,332.03 | 26.09 | 56.94 |
Note: The list of best PSU stocks for May 2026 is based on available data as of May 07, 2026 and sorted by market cap.
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 or 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 related documents carefully before investing.
Published on: May 7, 2026, 8:51 PM IST
Kusum Kumari
Kusum Kumari is a Content Writer with 4 years of experience in simplifying financial market concepts. Currently crafting insightful content at Angel One, She specialise in breaking down complex topics into easy-to-understand pieces, blending expertise in market fundamentals and technical analysis.
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