The central public sector enterprises (CPSEs) posted a robust 57% growth in aggregate net profit in FY22, reflecting higher earnings of the state-run firms from high commodity prices and lower operating costs. The robust growth has come despite waning of the favourable base, caused by the decline in operations in the pandemic period.

These firms reported a 70% growth in net profit in FY21 after clocking a decline of nearly 35% in FY20.

The net profit of the 247 CPSEs rose to Rs 2.49 trillion in FY22, according to data provided by the finance ministry to Parliament on Monday. About 254 operating CPSEs reported Rs 1.58 trillion in FY21.

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As per the information available, the total profit of 188 profit-making CPSEs during FY22 was Rs 2.64 trillion, up 39.85% on year. Fifty-nine loss-making CPSEs reported a total loss of Rs 15,000 crore during the last financial year, showing a decline of 37.82% on year.

The Centre had garnered Rs 59,000 crore in dividends from CPSEs in FY22, 28% more than the target of Rs 46,000 crore for the year, thanks to a sharp rise in prices of commodities like metals, mining and petroleum, which boosted the profits of these firms, FE had reported earlier.

The profitability of CPSEs depends on various factors that include demand and supply of finished goods and raw materials, prevailing market conditions, increase in revenue, decrease in expenses, stock valuation, etc.

Except for fuel retailers, most other firms in the energy, metal and mining sectors have reported robust profits in the initial quarters of the current financial year. The Centre’s FY23 dividend revenue receipts from the CPSEs may exceed the target of Rs 40,000 crore by at least Rs 10,000 crore.

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So far in FY23, dividends from CPSEs stood at Rs 34,661 crore or 87% of the full-year target.

Prodded by the government to reward shareholders, oil explorer ONGC and Coal India, which gained from high commodity prices, have stepped up dividends substantially. ONGC has paid Rs 7,409 crore to the government in dividends so far in FY23, 7% more than Rs 6,916 crore for the whole of FY22. Similarly, Coal India dividend payments to the Centre at Rs 7,336 crore so far in FY23 has surpassed Rs 7,132 it paid in the whole of FY22.