During the financial year 2024, the aggregate net profit of 92 listed PSUs increased by 44% to ₹5.3 lakh crore. The revenue of the sample surged by 4.5% during the year, which stood at ₹61.2 lakh crore, according to data sourced from Bloomberg. Data further reveals that over the last three years, the profit has grown at an annualised rate of 34.5%.
Many state-owned firms including ONGC, Coal India, IOCL and State Bank of India reported their highest-ever net profit in FY24. Further, most of them are looking to deliver better numbers going forward. For instance, the State Bank of India, which reported its highest-ever net profit of ₹61,077 crore in FY24 revised its guidance upward for the next year.
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“We believe sustaining our profitability at this level highlights the resilience of the underlying value drivers of the bank,” said Dinesh Khara, Chairman of SBI post Q4 results. The largest lender also occupies the second spot in profitability after Reliance Industries.
ONGC is another entity, which reported its highest-ever consolidated net profit of ₹49,221 crore in FY24. The sudden spike in ONGC’s net profit can be attributed to the enhanced show at its subsidiaries — HPCL and MRPL. While HPCL swung to a profit in FY24, MRPL reported a 35% increase in net profit to ₹3,597 crore.
ONGC, the country’s largest crude oil and natural gas producer also declared its highest-ever total dividend of ₹15,411 crore in FY24. Moreover, the company which made a total of 11 discoveries during the year also deployed around Rs 37,000 crore as Capex in FY24.
The number of loss-making companies in the PSU basket has decreased to nine in FY24 against 16 in FY21.
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Further, the latest rally in PSU stocks has also increased their contribution to the country’s market valuation. Currently, PSUs account for 17% of the BSE’s market capitalisation, which stood at ₹427 lakh crore as of Tuesday’s close. Yet, the contribution of these stocks stands below their historical average of 21%. The lower contribution to its historical average suggests there could be some more leg to the prevailing exuberance in the space.
The gauge for PUS stocks — the Nifty PSE index has more than doubled over the last year, against 25% gains yielded by the benchmark Nifty50 during the same period.
