As Prime Minister Narendra Modi’s third term begins and with the Budget 2024 just around the corner, the combined net profit of listed state-owned firms or PSU companies surpassed Rs 5 lakh crore for the first time in FY24.
Marking a historic milestone as public sector undertakings (PSUs) reported their best-ever performance. A key factor contributing to this record profitability was the decreasing number of loss-making units.
In FY24, the aggregate net profit of 92 listed PSUs surged by 44% to Rs 5.3 lakh crore. Revenue for the sample increased by 4.5%, reaching Rs 61.2 lakh crore, according to data available. Over the past three years, profits have grown at an annualized rate of 34.5%.
Several state-owned firms, including ONGC, Coal India, IOCL, and State Bank of India, reported their highest-ever net profits in FY24. Many are optimistic about delivering even better numbers in the future. For instance, the State Bank of India, which posted a record net profit of Rs 61,077 crore in FY24, has revised its guidance upward for the next year.
ONGC reported its highest-ever consolidated net profit of Rs 49,221 crore in FY24, driven by improved performance at its subsidiaries HPCL and MRPL. HPCL returned to profitability in FY24, while MRPL saw a 35% increase in net profit to Rs 3,597 crore.
ONGC, India’s largest crude oil and natural gas producer, also declared its highest-ever total dividend of Rs 15,411 crore and made 11 new discoveries, investing around Rs 37,000 crore in Capex in FY24.
The number of loss-making PSUs decreased to nine in FY24, compared to 16 in FY21. The recent rally in PSU stocks has boosted their contribution to the country’s market valuation, now accounting for 17% of the BSE’s market capitalization, which stood at Rs 427 lakh crore as of Tuesday’s close.
However, this is still below their historical average contribution of 21%, suggesting potential for further growth in the sector.The Nifty PSE index, a gauge for PSU stocks, has more than doubled over the past year, significantly outperforming the 25% gains of the benchmark Nifty50 during the same period.
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(With Inputs)
