The performance of India?s public sector units (PSUs) was unimpressive during 2009-10, data gathered by FE show. Results of 27 PSUs available with FE shows these PSUs?excluding banks?posted a 4.4% decline in their aggregate net profit while their overall sales grew marginally by 3.1% to Rs 2.59 lakh crore during 2009-10 from the level of Rs 2.51 lakh crore during 2008-09. Results of major oil & gas companies like ONGC, HPCL and BPCL are not yet announced.
The list of PSUs in this study includes majors like MMTC, MTNL, STC, Petronet LNG, PTC India, RCF, BEL and ITI.
Though the other income component of the 27 undertakings rose 1.6% to Rs 5,733 crore, their net profit declined to Rs 15,616 crore from the previous year?s Rs 16,341 crore. The ratio of operating profit to sales (OPM) of these PSUs fell by 49 basis points to 12.4% from 12.53%. This points to a decline in the operational efficiency of PSUs last year.
Swimming against the tide was Rashtriya Chemicals & Fertilisers, which showed a significant increase in its Operating Profit Margin. The company?s OPM rose 250 basis points to 8.32% from the previous year level of 5.82%.
According to Kishor P Ostwal, CMD of CNI Research , ?The under-performance of PSU companies is solely attributable to inefficiency. There is an urgent need for more participation of private sector in the management of PSU companies. The public-private partnership should gain momentum now.?
In the January-March 2010 quarter, the PSUs had a significantly stronger performance pattern, though issues of operational efficiency remain. The top line of 24 PSUs?excluding NPCIL, WBSET Co Ltd and Security Printers for which quarterly numbers were not separately available?increased by 35% to Rs 71,922 crore from the level of Rs 53,273 crore a year earlier. The other income of these companies increased by 49.3% to Rs 1,981 crore. However, their bottom line decreased by 37.6% to Rs 2,845 crore during January-March 2010 from Rs 4,562 crore during January-March 2009.
During the fourth quarter, MMTC recorded a steep jump in its net profit. The company?s net profit rose 147.6% to Rs 98.95 crore during January-March 2010 from Rs 39.97 crore a year earlier. The company?s sales more than trebled, rising by 253.5%, during the quarter. According to the directors? report, apart from trading in traditional items such as metals & minerals, bullion and agro-products, the company has diversified into other areas like joint venture projects which neatly dovetail into its core businesses.
A broader picture of PSU performance is available for the first nine months of 2009-10. During April-December 2009, the profit performance of 47 central PSUs (including oil & gas companies) was comparatively better despite a decline in their top line. The sales of 47 PSUs rose 15.3% to Rs 6.55 lakh crore during nine months. The operating profit of these companies increased 26.6% to Rs 98,511 crore from Rs 77,804 crore. And the net profit also rose 60.9% to Rs 46,722 crore from Rs 29,039 crore. The OPM of these companies were up 497 basis points to 15.02%.
Since the nine-month performance of PSUs displayed a healthy profit trend, a clear picture of their full-year performance would emerge only after more companies come out with their annual numbers.