* PSUs in India have generated a record $9 bn in free cash flows during FY15. This has come at a time when their net income (PAT) growth has been at a 15-year low—implying that they too have started to focus on cash generation—and, more importantly, that for $9bn of net income, the operating cash flows are at $34 bn—implying that these businesses have been able to shrink their balance sheets by $25 bn and release cash for growth in the past year.
* The deregulation of oil prices and the consequent release in working capital—particularly for companies in the oil & gas segment—would have driven cash flows for PSUs as a whole, the rise in operating cash flows, even for companies outside this space, is pretty strong.
* Central public sector units power utilities in India generally have a high level of operating cash across the years and, through good levels of cash, fund capex. However, Power Grid has cut down its cash requirement for consumables (becoming more efficient, or maybe it is just early days) and, as such, has generated much higher cash flow from operations.
* Coal India – which supplies primarily to the state and central sector utilities, the receivables remained largely constant.
* Improvement in the receivables situation for BHEL, where receivables improved by R23 bn during the year. This resulted in cash generated exceeding net income.
