19 loss-making CPSEs returned to profit in FY21, shows govt data

The total gross revenue of 255 operating CPSEs during FY21 was Rs 24.26 trillion as against Rs 24.58 trillion in the previous year, showing a decrease of 1.30%

Chennai Petroleum Corp (CPCL), Western Coalfields (WCL), and National Fertilizers (NFL) are among 19 central public sector enterprises (CPSEs) that returned to profit in FY21 from loss, data from the Public Sector Enterprises Survey 2020-21 shows.

Of the 19 PSUs belonging to industries, such as refinery, fertilisers, financial services, industrial and consumer goods, eight reported losses for two consecutive financial years preceding FY21.

The majority of CPSEs returning from loss to profit were from industrial and consumer goods sectors, such as Sambhar Salts, Hindustan Salts, Andrew Yule & Company, and Cement Corporation of India. There was an increase in the turnover and revenue backed by a fall in the expenditure of these CPSEs.

The salt manufacturing units of Sambhar Salts were able to leverage the favourable market conditions and accordingly the salt prices were increased, which, along with effective cost-cutting measures, contributed towards better performance.

The strong growth in cement consumption amid the pandemic is believed to have helped Cement Corporation of India make profit as labour availability in rural India aided growth in construction of rural infrastructure and low-cost housing. Andrew Yule & Company saw an increase in the net sales of tea and foreign earnings.

However, despite reporting profit over Rs 200 crore each, CPCL, WCL, and NFL registered a fall in their revenue. The profit was mainly on account of reduced expenditure. CPCL reduced its total expenses by 21 per cent, NFL by 10.45 per cent, and WCL 5.84 per cent.

Making a case for privatisation of more CPSEs, the FY20 Economic Survey mentioned that privatised CPSEs have performed better than their peers in terms of net worth, profit, return on equity, return on assets (RoA), and sales, among others. “The RoA and net profit margin turned around from negative to positive surpassing that of the peer firms which indicates that privatised CPSEs have been able to generate more wealth from the same resources,” the survey said.

The total gross revenue of 255 operating CPSEs during FY21 was Rs 24.26 trillion against Rs 24.58 trillion in the previous year, showing a decrease of 1.30 per cent. Operating CPSEs does not cover those CPSEs that are either under construction or under liquidation or closure. 

This decline in gross revenue in FY21 was largely due to the decline in the petroleum (refinery & marketing), transport & logistics services & crude oil CPSEs. At the sector level, the manufacturing, processing, and generation sector accounted for the maximum share (65.43 per cent) of gross revenue from operations in FY21, followed by services (25.75 per cent), mining & exploration (8.77 per cent), and agriculture (0.05 per cent). 

Of the 255 operational CPSEs, as many as 177 recorded net profit and 77 recorded net loss. Food Corporation of India reported no profit or loss. 

The aggregate net profit of profit-making CPSEs rose by 37.53 per cent to Rs 1.9 trillion in FY21 compared to Rs 1.4 trillion in the previous year. Among the profit-making CPSEs, the top five CPSEs accounted for 41.11 per cent of aggregate net profit comprising Indian Oil Corp, Bharat Petroleum Corporation, and NTPC. 

The aggregate loss of loss-making PSUs declined by 29.85 per cent to Rs 31,058 crore in FY21 against Rs 44,277 crore in the previous year. This reduction in loss is mainly due to a decline of loss in Bharat Sanchar Nigam (51.91 per cent), Rashtriya Ispat Nigam (79.82 per cent), Mangalore Refinery & Petrochemicals (92.31 per cent), and Mahanagar Telephone Nigam (33.38 per cent).