D&B launches third edition of India's Top PSUs 2010
Dun & Bradstreet, the world’s leading provider of global business information, knowledge and insight, today, released the third edition of its publication, India’s Top PSUs 2010. The study highlights key trends of Indian public sector undertakings (PSUs) and provides an insight into their performance. It also covers the changing dynamics of PSUs as compared to private and foreign companies.
Ms. Yashika Singh, Head – Economic Analysis, Dun & Bradstreet India said, “PSUs have dealt with the slowdown in the economy much better that their private sector counterparts - as is evident from the strong growth in sales clocked by the PSUs, even as the private sector witnessed a fall in growth rates. In fact, PSUs grew at a higher pace in FY09 as compared to the previous year.”
“The study presents many interesting insights – for example, R&D expenditure by the 30 PSUs that form part of this study has been increasing at a higher rate than for private sector companies. While this is a recent phenomenon – just in FY 08 and 09 – it is a clear indication of the emphasis that these companies are laying on R&D.,” she added.
D&B’s “India’s Top PSUs” was released by Chief Guest Mr Bhaskar Chatterjee, IAS, Secretary, Department of Public Enterprises, Government of India. Mr Debasish Sur, Head - Enterprise Business Services, Tata Teleservices Limited, was the Key Note Speaker. Leading names from the PSU sector participated in a panel discussion on “Indian PSUs: Strategies to maintain the competitive edge through the adoption of Information and Communication Technology (ICT)” that followed thereafter.
About D&B’s India’s Top PSUs 2010
D&B’s India’s Top PSUs 2010, recognises the strategic importance and contribution of the public sector in the Indian economy.
The publication includes 134 leading central public sector undertakings (CPSUs) that fall within the ambit of the Central government and represent major industry groups. This year’s edition, also includes a comparative study of listed PsUs, excluding banks, vis-a-vis the listed private sector companies with total income in excess of Rs 14.65 bn.
Key highlights of the study:
- Sales growth of PSUs increased at a higher pace than its private peers in FY09
1. According to a comparative study conducted by D&B India on PSUs and private sector companies, the growth in total sales of PSUs was marginally higher than its private sector counterparts.
2. PSU sales have grown at a higher pace in FY09 (19.2%) than in the year before (12.8%), in spite of fierce competition from private companies.
3. The companies that have recorded more than 100% sales growth in FY09 are Engineers India Ltd and Fertilisers & Chemicals Travancore Ltd, belonging to the capital goods and fertiliser sectors respectively. - Navratnas total income as a percentage of India’s Gross Domestic Product rises
1. In FY09, the navratnas total income was equivalent to 15.20% of India’s GDP (at current market prices) and it rose from 14.15% in FY07 to 14.25% in FY08.
2. The navratnas’ share in the combined total income of 134 CPSUs rose during both fiscal years FY08 and FY09.
3. During FY08 and FY09, the top three navratnas, IOCL, BPCL and HPCL, together accounted for 31.28% and 32.40% share in the combined total income of 134 CPSUs, respectively. - Banking and financial services leads in terms net profit contribution
1. D&B India’s study of Indian PSUs has revealed that in FY09, the banking and financial services sector led in terms of net profit contribution at 33.54% when compared with the previous year.
2. In the previous year (FY08), the oil & generation sector had ranked first in terms of net profit contribution. It contributed 27.94% of the entire net profits of the central public sector undertakings (CPSUs) taken for this study.
3. The second and third highest contributors to net profits in FY09 were the oil & gas generations sectors and iron & steel and metal sector with a share of 23.01% and 11.91% respectively. - Public Sector Companies have lower borrowings than private sector companies
1. The borrowing trend of the public sector companies is gentle than private sector ones, for whom the trend is much steeper. The 5-year CAGR (FY05-FY09) of borrowings for the public sector is 17.22% as against the private sector with a CAGR of 28.31%.
2. Bank borrowings constituted 44.89% of the total borrowings of the public sector companies in FY09. These borrowings are majorly long term in nature.
3. Foreign currency borrowings are the second largest borrowing source for public sector companies at 22.92% during the above period. - Public Sector Companies’ Research & Development expenditure increases over the years
1. In recent years, the public sector investment in R&D has grown at a faster rate.
2. In spite of the decrease in the R&D expenditure growth of public sector from 54% (FY08) to 33% (FY09), the growth still remains much higher than that of private companies’ R&D expenditure growth rate.
3. During FY09, there was a slowdown in the R&D expense in the sectors of engineering and capital goods, oil & gas sector, iron and steel as compared to the previous year, whereas the mining, power, fertiliser and the other sectors showed a remarkable contribution towards research and development expenditure.
4. Companies in capital goods sector like Bharat Electronics Ltd and Bharat Heavy Electricals Ltd are the major spender’s towards R&D among the total PSU. Mining company NMDC has shown a remarkable increase of more than 100% In FY09.
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