Operating CPSEs' net profit declines 34.6% to Rs 93,295 crore

The decline was mainly attributed to a sharp reduction in the profits of petroleum refiners and marketing cognate groups

The net profit of operating central public sector enterprises (CPSEs) fell 34.6 per cent year-on-year (YoY) to Rs 93,295 crore in financial year 2019-20 (FY20) as against a profit of Rs 1.42 trillion the previous year.
 
This was mainly attributed to a sharp reduction in the profits of petroleum refiners and marketing cognate groups, where it reduced from Rs 32,142 crore in FY19 to Rs 3,230 crore in FY20.
 
According to the Public Enterprises Survey 2019-20, which was tabled in Parliament on Wednesday, 84 loss-making CPSEs widened their losses by 41 per cent in FY20 to Rs 44,817 crore.

 

The survey, brought out by the Department of Public Enterprises under its new ministry of finance, further noted that profit of 171 CPSEs was down 20 per cent YoY to Rs 1.38 trillion.
 
According to the survey, of the total 366 CPSEs as on March-end 2020, 256 were operational, 96 were under construction, and 14 were under liquidation.
 
The profitability also hit the operating CPSEs’ revenue contribution as it stood at Rs 24.61 trillion in FY20 as against Rs 25.46 trillion in FY19, a decrease of 3.3 per cent.
 
“Contribution of all CPSEs to central exchequer by way of excise duty, custom duty, goods and services taxes, corporate tax, interest on central government loans, dividend, and other duties and taxes stood at Rs 3,76,425 crore in FY20 as against Rs 3,78,139 crore in FY19, 0.5 per cent lower,” the survey said.

 
At the cognate group-level, revenues are skewed with five of them – petroleum (refinery and marketing), trading and marketing, power generation, transport and logistics services, and crude oil — accounting for 78 per cent of the gross revenue in FY20.
 
Madan Sabnavis, chief economist, CARE Ratings, said: “These loss-making companies also need to be analysed in detail by the government and a decision taken as to whether these units can be turned around or whether they should be merged with other PSEs or private companies. If these units are habitual loss-making ones, then there would be less justification for keeping them running.”

 
Prominently, foreign exchange earnings of CPSEs through exports also fell 15 per cent to Rs 1.21 trillion in FY20 against Rs 1.43 trillion in FY19. This is also due to oil refiners, which alone contribute 48.4 per cent of foreign earnings.
 
However, manufacturing, processing and generation contributed the highest to India’s merchandise exports, accounting for 61 per cent of foreign exchange earnings, followed by services (22 per cent), and mining & exploration (17 per cent).
 
Total paid-up capital in all CPSEs reported a growth of 13 per cent to Rs 3.1 trillion as on March 31, 2020, as against Rs 2.7 trillion as on March 31, 2019.  Financial investments in all CPSEs totalled Rs 21.59 trillion as on March 31, 2020, recording a growth of 21 per cent. Reserves and surplus of all CPSEs fell 4 per cent to Rs 9.6 trillion as on March 31, 2020.