Top 10 PSU Stocks to Buy for Long-Term Investment

TOP 10

Public Sector Undertakings (PSUs) form the backbone of India’s economy. These government-backed giants are known for strong financials, stable dividends, and long-term growth.

With India focusing on infrastructure, renewable energy, defense, and digital banking, PSU stocks are expected to shine brighter in the coming decade.

In this article, we highlight the Top 10 PSU Stocks to Buy for Long Term in 2025, carefully analyzed using parameters like Revenue, Profit, Capital Expansion, Dividend Yield, Future Projects, Debt-Equity Ratio, Government Support, Valuation, and ESG Initiatives.

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1. State Bank of India (SBI)

Net Profit (FY25): ₹70,901 Crore (Record High), reflecting 16.08% YoY growth.

Dividend Income: Declared a final dividend of ₹15.90 per equity share for FY25.

Operating Performance: Pre-Provision Operating Profit (PPOP) was ₹1,10,579 Crore (up 17.89% YoY), with NII up 4.43% YoY and Domestic NIM between 2.9% - 3.15%.

Asset Quality: Gross NPA Ratio improved to 1.82% and Net NPA Ratio improved to 0.47%, supported by a PCR of 74.42%.

Capital / Expansion: Capital Adequacy Ratio (CAR) stood at 14.25%, with Whole Bank Advances growing by 12.03% and Deposits by 9.48%.

Debt-to-Equity: Ratio decreased to 12.42x (from 13.51x in FY24), indicating improved balance sheet stability.

P/E & Valuation: P/E Ratio (TTM/Consolidated) was in the range of ~10.65x - 11.81x, and Return on Assets (RoA) improved to 1.10%.

Sectoral Trend: The Indian banking sector showed strong asset quality improvement (low NPAs) and robust credit growth, despite pressure on NIMs.

Verdict: Outlook is Positive, based on healthy core profitability, strong growth visibility, and continued asset quality improvement.

2. NTPC Limited

Net Profit: Consolidated: ₹23,422 Cr; Standalone: ₹19,649 Cr. Consolidated PAT grew by ≈12.54% YoY (from ₹20,812 Cr in FY24), marking the highest-ever standalone profit in the company's history.

Dividend Income: ₹8.35 per equity share (on face value of ₹10). This includes the first and second interim dividends, demonstrating a healthy dividend payout policy.

Operating Performance: Operating Income: ₹1,88,138 Cr (≈5.38% YoY growth); EBITDA Margin: ≈28.8%. Performance is robust, supported by operational efficiency and a steady Coal-based PLF of ≈76.20% (significantly above the national average) in 9M FY25.

Asset Quality: Healthy and controlled. As a regulated power producer, NTPC's asset quality is strong with good receivables collection capability.

Capital / Expansion: Group Installed Capacity: ≈84 GW. Strong Capital Expenditure (Capex) continues, focused on green energy, progressing towards the ≈60 GW Renewable Energy (RE) capacity target by FY32.

Debt-to-Equity Ratio: Reduced to ≈1.35x (from 1.46x in FY24). The improving ratio indicates a healthy and stable balance sheet, which is reasonable given its large capital expenditure nature.

P/E & Valuation: P/E Ratio (TTM/Consolidated): ≈14.3x (from 16.1x in FY24); Return on Equity (RoE): ≈13.4%. Valuation remains stable and the RoE is maintained, consistent with its regulated and captive power generation business model.

Sectoral Trend: Strong Power Demand and Focus on Energy Transition. India's electricity demand continues to see robust growth, with a significant expansion in RE capacity driven by major players like NTPC focusing on 'Green Energy' and decarbonization.

Verdict: Positive Outlook. The future is positive due to sustained strong profit growth, healthy operational metrics (high PLF), falling debt-to-equity ratio, and aggressive focus on renewable energy and capacity expansion.

3. Coal India Limited (CIL)

Net Profit: Consolidated: ≈₹4,263 Crore (Q2 FY26). Net profit saw a sharp ≈30–32% YoY decline in Q2 FY26 (from ≈₹6,275 Cr in Q2 FY25) due to lower realizations and rising expenses.

Dividend Income: ₹10.25 per equity share (on face value of ₹10). CIL declared a second interim dividend for FY26, continuing its policy of high dividend payouts to shareholders.

Operating Performance: Revenue: ≈₹30,187 Crore (≈3.2% YoY decline); EBITDA Margin: ≈22.2%. Operating performance was impacted by lower sales volumes, a dip in e-auction realizations, and increased operational costs.

Asset Quality: Excellent (Net Cash Position). CIL maintains a robust balance sheet with a strong net cash position and negligible debt, which is typical for the company.

Capital / Expansion: Major Focus on Production Augmentation. CIL continues to focus on its goal of achieving 1 Billion Tonnes of production by FY26/27, with significant CAPEX for new projects and infrastructure.

Debt-to-Equity Ratio: Extremely Low, ≈0.09x (Annual, Mar 2025). This minimal ratio indicates the company relies overwhelmingly on equity and internal accruals, reflecting a very strong and unleveraged balance sheet.

P/E & Valuation: P/E Ratio (TTM/Consolidated): ≈7.7x; Return on Equity (RoE): ≈38.8% (Mar 2025). The low P/E multiple and high RoE reflect an attractive valuation, typical for a PSU with high cash flows and low growth expectations.

Sectoral Trend: Robust Domestic Demand, Volume-Growth Focus. India's core electricity and steel sectors continue to drive strong domestic coal demand. CIL focuses on improving operational efficiency and increasing production/offtake volumes to meet this demand.

Verdict: Mixed but Fundamentally Strong. Strong fundamentals (low debt, high RoE) and critical role in India's energy mix are positive, but recent earnings have been under pressure due to cost inflation and lower realizations.

4. Power Grid Corporation of India Ltd (POWERGRID)

Net Profit: Profitability is highly stable and regulated by the government's tariff mechanism, with Q2 FY26 net profit estimated at ≈₹3,417.76 Crore.

Dividend Income: The company maintains a policy of high dividend payouts (yield ≈3.05%), typical for a stable infrastructure utility.

Operating Performance: Revenue growth is predictable, driven by asset commissioning, resulting in very high EBITDA margins due to regulated transmission fees.

Asset Quality: A Regulated Asset Base (RAB) ensures a strong and secure revenue stream with minimal payment risk.

Capital / Expansion: Future growth is anchored by a large, long-term CAPEX plan (≈₹28,000–₹30,000 Crore in FY26) focused on Green Energy integration (HVDC/Corridors).

Debt-to-Equity Ratio: The high leverage (≈1.41x) is structural and manageable because its debt is backed by a secure, regulated income stream.

P/E & Valuation: Valuation is reasonable (P/E ≈17.8x) for a stable utility with a healthy and guaranteed RoE (≈17.26%) by the regulator.

Sectoral Trend: The company is the primary beneficiary of India's long-term push for grid expansion and renewable energy integration.

Verdict: POWERGRID is a fundamentally strong, essential, and stable utility poised for continued, regulated growth driven by national energy transition needs.

5. Bharat Electronics Ltd (BEL)

Net Profit (Consolidated): Profit showed strong 17.86% YoY growth driven by robust order execution, following the typical seasonal trend of high execution in H2.

Dividend Income: BEL maintains a moderate dividend payout (≈0.59% yield), typical for a high-growth PSU where funds are heavily reinvested into R&D and CAPEX.

Operating Performance: Revenue is strong at +25.75% YoY due to aggressive execution of the order book, maintaining a healthy EBITDA margin of ≈29.41%.

Order Book: The massive ₹74,453 Crore order book (approx. 3.5x annual revenue) ensures excellent revenue visibility and acts as the key growth driver for the next 3–4 years.

Balance Sheet / Debt: The company maintains a virtually zero-debt and net cash positive position, reflecting a fortress-like balance sheet and superior financial health.

P/E & Valuation: The high P/E (≈56x) reflects the market's expectation of high future growth in the defense sector, backed by a superior RoE (≈31.5%).

Sectoral Trend: BEL is the core beneficiary of India's 'Aatmanirbhar Bharat' defence push, focusing on R&D for next-generation indigenous electronic systems.

Verdict: BEL is a dominant, cash-rich, and debt-free defense major with a multi-year growth trajectory secured by its strategic order book.

6. Oil & Natural Gas Corporation (ONGC)

Net Profit (Consolidated) - Q2 FY26: Net Profit stood at ₹8,024.23 Crore (Q2 FY26, sequential data), reflecting the volatility and sensitivity to global crude oil and gas prices.
Dividend Income: The attractive TTM dividend yield of ≈4.80% provides a stable and significant income stream, typical for a stable, mature Maharatna PSU.
Operating Performance: Strong operating profit (≈₹17,185.28 Cr in Q2 FY26 Standalone) is supported by improved oil and gas realizations, but performance is constrained by muted domestic production growth.
Production & Outlook: Management focuses on a production revival, targeting a 44% oil and 89% gas output increase under the BP-TSP, despite delays in key projects like KG-98/2.
Balance Sheet / Debt: A low Debt-to-Equity ratio (D/E ≈0.50x) and strong interest coverage (EBIT/Interest ≈25x) indicate robust financial health for a capital-intensive upstream energy major.
P/E & Valuation: The low P/E ratio (TTM ≈9x) suggests the stock is undervalued relative to its current earnings, reflecting market concerns over commodity price fluctuation and production stability.
Sectoral Trend: ONGC is aggressively executing an ambitious ₹9,300 Crore cost-efficiency plan to reduce its ≈$45/barrel production cost via technology and global partnerships.
Verdict: A financially resilient Maharatna that is the core anchor of India's energy security, focusing on capex-led production revival and significant cost optimization.

7. GAIL (India) Limited

Net Profit (Consolidated) - Q2 FY26: Net Profit stood at ₹2,369.20 Crore, a 25.6% YoY decline, reflecting strong pressure on petrochemical segment margins.
Dividend Income: Attractive TTM dividend yield of ≈4.10% provides a stable income stream, typical for a mature Maharatna utility.
Operating Performance: Standalone PAT rose 18% sequentially (QoQ) to ₹2,217 Crore, but the Operating Margin contracted to ≈10.39% due to weak performance and pre-tax losses in the petrochemical division.
Production & Outlook: Management projects volume-led growth, targeting gas transmission volumes to cross 150 MMSCMD post-FY28. Growth is underpinned by pipeline completion (e.g., MNJPL 97% done) and CGD expansion.
Balance Sheet/Debt: Robust financial health shown by a very low Debt-to-Equity ratio (D/E ≈ 0.19x) and strong LTM interest coverage (≈14.2x), indicating minimal financial risk.
P/E & Valuation: The low TTM P/E ratio (≈11.80x) suggests the stock is undervalued compared to the industry average (≈18x), largely due to concerns over non-core segment volatility.
Sectoral Trend: Strategic focus on securing additional LNG regasification capacity and high Capex (₹10,700 Crore for FY26) on pipeline and CGD to ensure long-term energy infrastructure growth.
Verdict: A core, financially solid Maharatna with a stable dividend, currently facing temporary pressure from petrochemical margins but with a strong foundation and clear strategic focus on long-term volume and infrastructure expansion.

8. Hindustan Aeronautics Limited (HAL)

Net Profit (Consolidated) - Q1 FY26 (Latest Available): Net Profit was ₹1,383.77 Crore, a moderate 2.2% YoY decline from ₹1,437.14 Crore (Q1 FY25), typical due to the defense industry's H2-heavy revenue model.
Dividend Income: The TTM dividend yield is low (≈0.85%) reflecting the company's high growth and capital reinvestment focus, typical for defense PSUs rather than utility stocks.
Operating Performance: Revenue from operations was up 11% (Q1 FY26 Standalone), but the company faces an "Execution Challenge"—translating its enormous order book into timely revenue has been a recurring issue.
Production & Outlook: HAL has a record order book of ≈₹2.45 Trillion (as of Q2 FY26), representing 32x its FY25 revenue. This is led by the order for 97 Light Combat Aircraft (LCA) Mk-1A (≈₹62,400 Crore). This provides multi-year revenue visibility (10–15 years).
Balance Sheet/Debt: Excellent financial health with a practically zero Debt-to-Equity ratio (≈0.00x–0.1%) and an extremely high Interest Coverage ratio (≈500x), indicating minimal to no financial risk. HAL has more cash than debt.
P/E & Valuation: The TTM P/E ratio is high (≈37–39x) compared to its historical average, reflecting the market's aggressive pricing of the strong future order book and long-term monopoly growth. It is, however, lower than some peers (Industry Average ≈58x).
Sectoral Trend: The stock is a key beneficiary of India's "Atmanirbhar Bharat" (self-reliant India) defense drive. The government is reportedly considering restructuring HAL into separate entities (fixed-wing, helicopters, MRO) to boost efficiency and accelerate deliveries.
Verdict: HAL is a financially robust monopoly with an unparalleled order book providing long-term growth certainty. Its primary challenge is the speed of execution to bridge the gap between strong orders and timely revenue realization. The high valuation is justified by its dominant position in a high-growth strategic sector.

9. Indian Oil Corporation (IOC / IndianOil)

Net Profit (Consolidated) - Q1 FY26: ₹6,808 Crore, a massive 83% YoY surge (from ₹3,723 Cr), driven by recovering refining and marketing margins.
Dividend Income: Moderate-to-High TTM Dividend Yield (≈1.8%–9%). Typical for an income-focused PSU in the Oil Marketing Company (OMC) sector.
Operating Performance: Revenue flat YoY. Profit surge offset by significant inventory losses (₹6,500 Cr in standalone) due to crude price volatility, despite underlying Gross Refining Margin (GRM) normalization (≈$6.91/bbl).
Production & Outlook: Strong domestic sales volume growth (≈4.2% YoY). Defined by large, long-term CAPEX plans (≈₹30,000–40,000 Cr annually) for refinery expansion, petrochemicals, and green energy diversification.
Balance Sheet/Debt: Robust financial health for its size, but carries a substantial debt load due to CAPEX. Volatile Interest Coverage Ratio (TTM ≈2.9x), though government support (e.g., LPG under-recovery compensation) mitigates risk.
P/E & Valuation: Low TTM P/E (≈14.6x). Reflects inherent sector volatility and regulatory risk concerning domestic fuel pricing, valuing the company on its stable asset base rather than high growth multiples.
Sectoral Trend: Key strategic player in India's energy security. Highly sensitive to global crude price fluctuations and domestic pricing policies. Future margin stability relies on diversification into petrochemicals and clean energy.
Verdict: Strategically vital, operationally massive company with scale and government backing. The primary risk is the unpredictable global oil cycle and regulatory intervention. The low valuation reflects these risks but is supported by a clear long-term, high-CAPEX growth strategy.

10. Indian Railway Finance Corporation (IRFC)

Net Profit (PAT) - Q1 FY26: ₹1,746 Crore, marking a 10.7% YoY increase (from ₹1,577 Cr), reflecting record quarterly earnings, primarily driven by efficient cost of funds and improved spreads.
Dividend Income: Moderate-to-High TTM Dividend Yield (≈1.3%). Typical for an income-focused PSU with high capital needs. The company recently declared its highest-ever interim dividend of ₹1.05/share.
Operating Performance: Revenue from operations grew 2.2% YoY to ₹6,915 Crore. The focus is on robust Net Interest Margin (NIM) improvement, which hit a three-year high of 1.53% (annualized) in Q1 FY26.
Asset & Outlook: Maintains a Zero Non-Performing Asset (NPA) track record. Assets Under Management (AUM for Q2 FY26) stand at a strong ₹4.62 Lakh Crore. Strategic diversification is key, with new sanctions of over ₹45,000 Crore in H1 FY26 across railway-linked sectors like renewables and energy infrastructure.
Balance Sheet/Debt: High debt-to-equity ratio (≈7.44x in Q1 FY26), which is characteristic of its pure Non-Banking Financial Company (NBFC) model of borrowing for lending. The ratio is, however, improving (down from 8.02x YoY) due to rising Net Worth (record high ≈₹54,424 Cr).
P/E & Valuation: Elevated TTM P/E (≈23.7x). This premium valuation reflects its monopolistic position as the primary financier for Indian Railways, zero NPA status, and the earnings certainty provided by a guaranteed business model and government backing.
Sectoral Trend: A specialized NBFC directly linked to India's massive railway CAPEX cycle. Its earnings stability is extremely high, and future growth is tied to the government's continued focus and investment in the rail and allied infrastructure ecosystem.
Verdict: A core, strategic financing arm for national infrastructure. Offers high stability and growth visibility (due to government mandate and diversification) but carries a high leverage ratio inherent to its specialized lending model.

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Public Sector Undertakings (PSUs) continue to play a pivotal role in India’s economic growth, especially across banking, power, oil, and infrastructure sectors. With government-backed projects, consistent dividend payouts, strong capital structures, and clear visibility on future expansion, PSUs are once again gaining investor confidence
In 2025 and beyond, leading players like SBI, NTPC, ONGC, Coal India, and Power Grid Corporation are well-positioned to deliver stable returns driven by robust fundamentals, policy support, and steady dividend income. Investors seeking a blend of growth, stability, and income can consider these top PSU stocks as part of a long-term wealth-building portfolio.
As always, it’s wise to analyze parameters such as Debt-to-Equity Ratio, P/E Valuation, Government Policy Support, and Sectoral Trends before investing. With India’s focus on energy transition, infrastructure development, and financial inclusion, PSUs are poised to remain strong performers in the coming decade.

Data Sources & References:

SBI FY25 / quarterly results pages and financials.
NTPC FY25 press release (Group total income & PAT).
Coal India FY25 Q4 / FY25 result coverage.
POWERGRID Q4 / FY25 press release (Total income & PAT).
Bharat Electronics (BEL) Q4 FY25 results / release.
ONGC FY25 result coverage.
GAIL financial result pages & filings.
HAL FY25 / Q4FY25 reporting and analysis.
IndianOil (IOC) FY25 audited figures and press notes.
IRFC Q4 FY25 & Q2 FY26 results / investor presentation.

Disclaimer: The data and information provided are for educational purposes only and should not be considered as financial advice. Investors are advised to conduct their own research before making any investment decisions.