THE 50-50 SPLIT

Government companies were once written off as inefficient and lacking the competitive spirit of their private sector counterparts. This year, five of them make it to the top 10 of the BT500 listing that celebrates India's most profitable companies

- BY KRISHNA GOPALAN

IF SOMEONE HAD told you that the list of top ten profitable companies would one day have five entries from the public sector, you might have laughed it off, right? Well, you can’t be blamed as, for years, PSUs were branded as a den of inefficiency and political interference. Not anymore.

In FY20, the BT500 profit-wise listing had three public sector undertakings (PSUs), State Bank of India (SBI), Coal India and Oil and Natural Gas Corporation (ONGC), in the top 10. In FY18, only ONGC and NTPC had made the cut. But the FY25 list has—apart from SBI, Coal India and ONGC—Life Insurance Corporation of India (LIC) and Power Finance Corporation (PFC) as well. Of course, the big boys in the private sector—ranging from diversified conglomerates such as Reliance Industries or RIL (first position) to those in banking and financial services such as HDFC Bank (3rd rank) —also delivered a solid performance as India Inc’s profit vanguards.

As corporate India enters challenging times, thanks to geopolitical uncertainties and the US’ tariff onslaught, it will be tested like never before. As the country faces these challenges with grit and will, can its most profitable companies, especially the PSUs, act as engines of a national revival?

A NEW STRATEGY

While there are many reasons for the performance of PSUs, one big factor is a more rational capital allocation strategy. “Today, these organisations have created infrastructure leading to scale. With the government in a more meaningful role, managements can have sharper focus,” says Deven R Choksey, Chairman and MD of wealth management and investment advisory firm DR-Choksey Finserv. He gives the central government credit for encouraging PSUs to go for more capex and being tough with underperformers.