In FY24, India’s public sector undertakings (PSUs) showed outstanding financial performance, highlighting their importance in the economy. According to ACE Equity data, 56 listed public sector undertakings (PSUs) in the Bombay Stock Exchange PSU index reached a record combined profit of over Rs 5 lakh crore. This represents a 48 percent increase in profit after tax (PAT), rising from Rs 3.43 lakh crore in FY23 to Rs 5.07 lakh crore. This remarkable growth was fueled by effective operations, strategic decisions, and favourable market conditions.
The remarkable profit growth was complemented by significant revenue generation, with total revenues reaching Rs 53 lakh crore. This highlights the broad scope and influence of PSUs across sectors like banking, energy, insurance, and infrastructure. Their strong financial performance isn’t only about profits and revenues; it also means a significant contribution to government finances. In FY24, PSUs collectively paid Rs 1.68 lakh crore in taxes, highlighting their crucial role as a key revenue source for the government.
Highlighting the triumph of these government-owned companies, 14 PSUs each made profits surpassing Rs 10,000 crore. This select group comprises major players like State Bank of India (SBI), Oil & Natural Gas Corporation (ONGC), and Indian Oil Corporation (IOC). Their achievements showcase the effective leadership and operational prowess within these firms, which have adeptly tackled economic hurdles and capitalised on opportunities to boost their earnings.
Leading the pack, the State Bank of India (SBI) emerged as the most profitable PSU, with its PAT rising by 20 percent to Rs 68,138 crore in FY24 from Rs 56,558 crore in the previous fiscal year. SBI contributed Rs 23,102 crore in taxes and saw its market capitalisation grow to Rs 7.37 lakh crore, with its stock price increasing by 42 percent to Rs 826 as of May 30, 2024. Oil & Natural Gas Corporation (ONGC) followed, posting a PAT of Rs 54,705 crore, a 61 percent increase from FY23’s Rs 34,012 crore. ONGC paid Rs 19,759 crore in taxes and recorded revenues of Rs 6.43 lakh crore, with its market capitalisation at Rs 3.35 lakh crore and stock price surging 73 percent over the past year.
Indian Oil Corporation (IOC) secured the third spot with a PAT of Rs 41,615 crore, marking a 284 percent jump from Rs 10,842 crore in the previous fiscal. IOC paid Rs 14,127 crore in taxes, and its stock price increased by 80 percent, resulting in a current market capitalisation of Rs 2.29 lakh crore. Coal India reported a profit increase of 16 percent to Rs 36,942 crore in FY24 from Rs 31,731 crore in FY23, paying Rs 11,443 crore in taxes. Its market capitalisation reached Rs 2.97 lakh crore, with the stock gaining 101 percent over 12 months to Rs 482.
In the last fiscal year, Life Insurance Corporation of India (LIC) ranked fifth among top performers. It made a profit after tax (PAT) of Rs 36,844 crore, which is 16% higher than the previous year’s Rs 31,812 crore. LIC’s total revenue was Rs 4.77 lakh crore, and it paid Rs 6,098 crore in taxes. The company’s market value is Rs 6.28 lakh crore, and its stock saw a 67% increase in value over the year. Other leading performers included Power Finance Corporation, Bharat Petroleum Corporation, NTPC, Bank of Baroda, and Power Grid Corporation of India, all showing strong profits. These companies did well financially and made significant contributions to government revenue, highlighting their crucial role in India’s economic growth and financial stability.
When these government-owned companies make good profits, it shows that businesses are doing well. This helps the economy grow because they hire more people and spend more money, which boosts different parts of the economy. Plus, the taxes they pay help the government get more money to spend on important things. This revenue can be utilised for various development projects, infrastructure improvements, social welfare programmes, and other initiatives aimed at improving the quality of life for citizens. The robust performance of these PSUs enhances investor confidence in the Indian market. When investors see profitable and well-managed companies, they are more likely to invest in Indian stocks and businesses, which further stimulates economic growth and development.
Moreover, Strong PSUs contribute to the overall stability of the financial system. They provide essential services and products, such as insurance, energy, banking, and infrastructure, which are crucial for the smooth functioning of the economy. Overall, the success of these PSUs is a positive sign for India’s economy, demonstrating resilience, competitiveness, and potential for future growth and development.
