Central Public Sector Enterprises (CPSEs) posted a 15% year-on-year decline in their aggregate net profits to Rs 2.12 trillion in FY23, owing mainly to the decline in the earnings of oil-marketing and steel companies that are vulnerable to global commodity price cycles, and reduced profitability of steel firms.

But the CPSEs, which withstood the pandemic much better than the broader economy, largely held pace in the last financial year too. Of the Rs 38,000 crore annual decline in aggregate CPSE net profits, almost all was attributable to the inability of OMCs to pass on the higher cost of crude oil to the retail consumers of auto fuels.

Also, there wasn’t a commensurate annual decline in dividend payouts by the CPSEs in FY23 (down just 8.7%) as the government continued to nudge them to reward it and other shareholders, as it strove to boost non-debt receipts and find resources for the elevated budget capex (see chart).

It may be noted that calender year 2023 was best year for CPSE stocks in a decade, with the PSU index, comprising 56 listed firms, rallying over 53%. The other public sector index, BSE CPSE index with 57 stocks, did even better in the year, rising 71.7%. This was when rhe benchmarks’ Sensex and Nifty-50 rose 17.3% and 18.4%, respectively in 2023.

In fact, the rally in PSU stocks in 2023 was so impressive that out of 84 listed stocks, almost a fourth gave returns of over 100% while another 25 yielded returns between 50% and 100%.

CPSEs, had reported a whopping 51% annual growth in aggregate net profit at Rs 2.49 trillion in FY22.

In FY23, Oil & Natural Gas Corporation maintained its standing as the most profitable CPSE with Rs 38,829 crore net profit in FY23 compared with Rs 40,306 crore in FY22, despite the imposition of a windfall tax on domestically produced crude in the wake of a jump in global prices. ONGC was followed by NTPC with a net profit of 17,197 crore and Power Grid with Rs 15,333 crore in FY23.

However, FY23 was an uninspiring year for state-run fuel retailer-cum-refiners which together reported a 78% fall in their profit at Rs 11,013 crore from Rs 49,789 crore in FY22, largely due to their inability to pass on the increase in prices to consumers. These retailing losses, however, were mostly recovered by these firms in FY24 as the consumer prices were unchanged when the global process fell.

Hindustan Petroleum Corporation (HPCL) was the top loss maker among CPSEs across the board with Rs 8,974 crore in FY23 compared with a profit of Rs 6,383 crore in FY22. BSNL, which was the top loss maker in FY22 was pushed to the second spot with a loss of Rs 8,162 crore in FY23, followed by MTNL (-Rs 2,911 crore) and Rashtriya Ispat Nigam Ltd (-Rs 2,859 crore).

As many as 18 CPSEs returned to profit in FY23 by reporting a total profit of Rs 2,407 crore in comparison to a total loss of Rs 1,692 crore in FY22. These include Eastern Coalfields and MMTC.

As many as 117 companies declared Rs 1.05 trillion dividend in FY23, down 8.15% compared with Rs 1.15 trillion in FY22.

Total gross revenue from the operations of 254 operating CPSEs during FY23 was Rs 37.9 trillion as against Rs 31.36 trillion in FY22, showing an increase of 21%.

Net worth of all CPSEs increased from Rs 14.97 trillion as on March 31, 2022 to Rs 17.33 trillion as on March 31, 2023, showing an increase of 15.75%.

Reserves and surplus of all CPSEs stood at Rs 12.81 trillion as on March 31, 2023 as against Rs 11.89 trillion as on March 31, 2022, up 7.73%.