Delivering consistent growth in profit amidst a global economic crisis could be a formidable challenge for companies. But there are at least ten public sector enterprises which have seen a steady growth in their bottom lines in the volatile 2007-12 period.
According to an FE study, ten out of 73 listed PSUs have delivered consistent growth in net profits during 2007-12. Leading the pack among central PSUs is Engineers India Ltd, which has seen a 35.88% compounded annual growth (CAGR) in net profit during 2007-12. Gujarat State Petronet, a natural gas transporter, is the only state PSU in this category but it scores highest on the financial parameter with a 42.19% CAGR growth in profit after tax (PAT) during the period and is way ahead of GAIL India, the PAT CAGR of which works out to 11.79%.
There was wide variation in the financial performance of companies from the power sector. For example, while power equipment maker Bhel’?s PAT grew at a CAGR of 24.03% during the period, NTPC?s rose at just 7.3%. Similarly, CAGR in Power Grid?s net profit was 21.86% while it was 20.70% for NHPC.Strong demand for power equipment explains the robust growth in Bhel?s net profit. The company also aggressively expanded its manufacturing capacity to tap the surge in demand for power equipment. The lower growth in NTPC?s PAT can be attributed to the slowdown in investment by the company in the face of environmental and land acquisition hurdles to its power projects.
Power Grid invested aggressively during the 11 th Five-Year Plan to bridge the deficit in the national transmission network, a long-neglected area. It undertook several system strengthening projects besides greenfield transmission projects which helped it exceed the investment pace of the power generation sector. Under normal circumstances, transmission projects are planned matching with the commissioning schedule of the associated generating units.Oil India and Balmer& Lawrie from the oil and gas sector also figured on the list. But ONGC was conspicuous by its absence from the list.