New Delhi: Central Public Sector Enterprises (CPSEs) in the petroleum, power, and financial sectors dominated government company earnings in the fiscal year 2021-22, contributing nearly 70 percent of the total net profits, according to the latest performance audit report released by the Comptroller and Auditor General (CAG) of India.
Key Sectors Fuel Majority of PSU Earnings
The comprehensive CAG report, tabled in Parliament, revealed that out of the total Rs 2,69,307 crore profits earned by 258 CPSEs in FY22, the 90 enterprises operating in petroleum, power, and financial services generated Rs 1,86,317 crore – accounting for 69.18% of total PSU profits. This underlines the continuing dominance of core energy and finance sectors in India’s public sector landscape.
Top Profit-Making CPSEs Lead Earnings Chart
Leading the pack, Oil and Natural Gas Corporation Ltd (ONGC) posted a massive net profit of Rs 40,306 crore, followed by Indian Oil Corporation Ltd (IOCL) with Rs 24,184 crore, and NTPC Ltd which recorded Rs 16,677 crore. Other major contributors included Power Grid Corporation of India Ltd (Rs 16,016 crore) and State Bank of India (Rs 15,470 crore).
Combined, these five top performers generated over Rs 1.12 lakh crore – more than 41% of total government company profits, highlighting their critical role in the PSU ecosystem.
Other Significant Contributors
Apart from the top five, petroleum sector firms such as Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) delivered profits exceeding Rs 10,000 crore each, at Rs 11,681 crore and Rs 10,682 crore respectively. Coal India Ltd, representing the mining sector, also posted a significant Rs 17,378 crore net profit.
Petroleum Sector Leads Market Capitalisation and Dividend Contributions
The petroleum and natural gas sector dominated not just in profits but also in market valuation and dividend payouts. As of March 2022, petroleum CPSEs had a combined market capitalisation of Rs 5.44 lakh crore, representing 34.24% of the total CPSE market cap and recording the highest absolute market cap gain of Rs 1.13 lakh crore or 26.44% during FY22.
Furthermore, nine petroleum CPSEs contributed Rs 37,833 crore in dividends, comprising over one-third (34.07%) of the total dividend payouts by all government enterprises.
Dividend Non-Compliance and Market Cap Movements
Despite strong financial performance, the CAG pointed out non-compliance with Centre’s dividend directives by 45 CPSEs that had sufficient reserves but failed to declare dividends. This non-compliance resulted in a Rs 5,811 crore shortfall in government dividend receipts.
Additionally, the report noted shifts in CPSE market classifications: one Small Cap entity was promoted to Mid Cap, three Mid Cap CPSEs moved to Large Cap, while one Large Cap slipped to Mid Cap. The year ended with 13 Mid Cap and 10 Large Cap CPSEs.
Public Sector Stocks Outperform Broader Markets
The strong performance of CPSEs was reflected in their stock market returns, with the S&P BSE-CPSE Index surging 27.17% in FY22, outperforming the broader S&P BSE Sensex gain of 18.3%. This highlights growing investor confidence in government enterprises, especially in petroleum, power, and finance sectors.
