PSUs' Q3 results: Stellar quarterly show

Written by Pradip Kumar Dey | Updated: Feb 14 2011, 15:51pm hrs
Public sector undertakings reported a steep rise in their third quarter sales and profitability. While better numbers from oil PSUs brightened the overall picture for the PSU fraternity, many non-oil PSUs reported impressive profit growth, thanks to lower spending and higher other income. But a disappointing aspect of the quarter was a more than 25% increase in the sample PSUs' interest expenditure.

A study of 38 PSUs, (central & states) for which third quarter results were available, shows their aggregate sales rose 18.9% to Rs 2.42 lakh crore in Oct-Dec 2010. This was significantly higher than the 4.1% rise in sales, to Rs 2.03 lakh crore, clocked for Oct-Dec09.

The operating profit of these PSUs increased by 28.4% to Rs 44,932 crore during Oct-Dec10, from Rs 34,999 crore, up 18.5%, during the quarter ended Dec09.

Other income growth turned out to be a positive 20.2% during Oct-Dec10 from a negative 38.4% during Oct-Dec09.

The operating profit-to-sales ratio increased 137 basis points to 18.57% during Oct-Dec10, but was lower than the 209 basis points rise, to 17.20%, recorded for Oct-Dec 09.

However, total interest expenses rose higher than proportionately when compared with total sales, indicating a slippage in cost controls. Total interest expenses of the sample PSUs increased by 25.8% to Rs 5,223 crore during Oct-Dec10 from the level of Rs 4,153 crore during Oct-Dec09.

Without oil PSUs, the total operating profit of 35 PSUs increased by 28.4% to Rs 44,932 crore during Oct-Dec10 from Rs 34,999 crore during Oct-Dec09.

The list of 38 PSUs includes heavyweights like IOC, ONGC, BPCL, HPCL, SCI, NTPC, SAIL, GAIL and MMTC. Individual analysis indicates that companies like BHEL, ONGC, Hind Copper, IOC, BPCL, HPCL, GAIL, NMDC and GMDC have done exceptionally well during the third quarter.

The operating profit of BHEL increased by 24.6% to Rs 8,849 crore during Oct-Dec10. It has maintained its track record of earning profits uninterruptedly for nearly four decades.

Among the PSUs studied, a significant increase in sales during Oct-Dec10 was seen in the case of NMDC, Engineers India, Indraprastha Gas, Petronet LNG and Power Grid Corporation.

The sales of NMDC increased by 65.1% to Rs 2,621 crore during Oct-Dec 10. Its operating profit increased by 79.1% to Rs 2,311 crore during Oct.-Dec10 from the level of Rs 1,290 crore a year earlier.

On the profit front, net profit of the 38 PSUs increased by 36.6% to Rs 21,665 crore in Oct-Dec10 from the level of Rs 15,861 crore in Oct-Dec09. The net profit to sales ratio increased by 116 basis points to 8.95% during Oct-Dec10 from 7.79% a year earlier. This has happened probably from the significant increases in the profit after tax of companies like ONGC, Oil India, MRPL, STC and GSFC.

The net profit of ONGC increased by 132% to Rs 7,083 crore during the third quarter of the current financial year.

Of the sample PSUs, 21 showed an increase in the operating profit to sales ratio. They include ONGC, GSFC, Madras Fertilisers, Hind Copper and NHPC.