A public sector undertaking (PSU) is a company owned by the government. The question asks for the largest PSU.
Largest can be measured by various metrics, but in the context of Indian PSUs, it is most commonly measured by the number of employees.
Indian Railways is the largest employer in India and one of the largest employers in the world. It has a massive workforce responsible for operating the country's extensive rail network.
While companies like Indian Oil Corporation are very large in terms of revenue, Indian Railways surpasses all other PSUs in terms of the sheer size of its workforce.
Therefore, Indian Railways is considered the largest public sector undertaking in India.