PSUs outsmart pvt sector cos

MUMBAI, July 20: Public sector undertakings (PSUs) have outsmarted private sector companies in sales turnover and profits. As many as 46 PS...

MUMBAI, July 20: Public sector undertakings (PSUs) have outsmarted private sector companies in sales turnover and profits. As many as 46 PSUs listed on various stock exchanges in the country accounted for nearly half (47 per cent) of the total sales of some 1,724 companies for which information was available for 1996-97.

According to the Centre for Monitoring Economy (CMIE), these 46 PSUs have recorded a better performance than the private sector companies during 1996-97. Sales of the PSUs grew by 14.7 per cent as against 11 per cent growth recorded by the private sector companies.

Also, PSUs recorded 7.1 per cent growth in profits before depreciation, interest and tax (PBIT), while the private sector companies recorded just 3.4 pre cent growth under this category.

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What is more, profit after tax (PAT) of private sector companies declined by a massive 20 per cent during 1996-97. Interestingly, the 46 PSUs managed to maintain their profit levels with a 0.5 per cent increase in PAT over previous year.

This is despite the fact that the PSUs have a higher tax incidence at around 22 per cent compared with less than 20 per cent tax incidence in private sector. However, CMIE says, the increase in tax incidence was more pronounced in the private sector companies during 1996-97 than in the PSUs.

Twenty of the 36 industry grous recorded decline in its PAT, while only six industry groups recorded a healthy performance over the previous year. These are tea & coffee, beverages, and tobacco, drugs and pharmaceuticals, electronics, automobiles and its ancillaries.

Each of these recorded a healthy increase in sales, PBIT and PAT during 1996-97. Without identifying either the profitable PSUs or less performing private sector companies, the CMIE report indicates that the highest sales growth of 27.2 per cent was recorded by the sugar sector, followed by refinery products (26.3 per cent), automobiles and other vehicles (24 per cent each), pumps and compressors (23.3 per cent) and edible oils & vanaspati (20.9 per cent).

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Electronics segment recorded the highest 60 per cent growth in PBIT, followed by sugar segment (49.8 per cent), other vehicles (49.0 per cent), other chemicals (37.7 per cent), and beverages and tobboco (24.8 per cent).

While negative net profit was the most pronounced factor in profitability for most segments covered by CMIE, electronics segment recorded a whooping 919.5 per cent growth over previous year’s negative 44.3 per cent, followed remotely by other vehicles segment (45.9 per cent), pumps & compressors (36.8 per cent) and tea & coffee (15.7 per cent).

The dramatic jump in profitability in electronics industry, according to CMIE, is essentially because of the sharp increase in the software exports of the industry.

Synthetic textiles recorded the highest drop in its profitability of 195.9 per cent in addition to 60.1 per cent in the previous year.