There are 257 PSUs (Public Sector Units) operating in India as on FY2017. Out of these 257 PSUs, 174 turned out to be profit making public sector enterprises in FY2017. In 2017, The PSUs have contributed around Rs 3.85 lakh crore to Indian economy in terms of interest payments, dividends, corporate taxes, and exercise duty, etc.  The total net profit of 257 PSUs is worth Rs 1.27 lakh crore in FY2017. The investments went into PSUs is worth Rs 21 lakh crore; the annual revenues turned out to be Rs 19.5 lakh crore. Based on my research of 24 PSUs operating in India (Data Source: Dalal Street Investment Journal, May 07.2018), the reasons for PSU Increase in profits; and reasons for Decrease in profits/getting losses are tabulated in Table-1:

Table 1: Reasons for PSU Increase in Profits & Decrease in Profits / Getting Losses


Sl.No. Reasons for PSU Increase in Profits Reasons for PSU Decrease in Profits/Getting Losses
1. Raise in Crude Oil Prices Decrease in Dividend and Other income
2. On Account of Inventory Gains Increase in Expenditure
3. Foreign Exchange Rate Gains/Variations Expenses of Employee Benefits
4. Pickup of Domestic Demand for Steel in India; Impairment Loss in Investment
5. Anti-Dumping duty on Chinese Steel Products Decrease in Revenue
6. Diversifying businesses
7. Commissioning of Assets
8. Lower Employee count and increased profitability
9. Robust Organizational Performance and Sound Fundamentals
10. Improved Project Execution
11. Higher Domestic Market sales
12. Better Operating Efficiencies
13. Increase in turnover
14. Better Price Realization
15. High Material Processing
16. Better Margins and High Sales Realizations
17. Rise in Product Prices
18. Good Marketing Strategies
19. Better Product Mix
20. Improved Financial Performance


Table-1 lists the top-20 Critical Reasons for PSUs’ increase in profits and Top-5 Critical Reasons for PSUs’ decrease in profits or encountering losses. This research is based on the PSUs earnings in FY2017.

Please remember this is only for learning/academic purpose;

Happy Reading……

Dr.Goparaju Purna Sudhakar


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