What’s fueling the sharp rise in PSU profitability over the past five years?

There are over 50 central and state government-run companies in the latest ET 500 list. At the aggregate level, the share of net sales of the PSU pack rose marginally to 31% in FY25 from 29.8% in FY19.

In net profit terms, however, the metric has sharply expanded to 30.7% from 17.9%, reflecting improved profitability. The EBIT margin of PSUs rose to 30.4% in FY25 from 24.2% in FY19. For the non-PSU sample, EBIT margin improved to 22.1% from 18.5%.

Agencies

Aggregate net sales of the PSU pack in the ET 500 increased at a five-year compounded annual growth rate (CAGR) of 14.8% in FY25, while net profit grew by 39.5% annually during the period. For non-PSU companies, the annual growth rate for sales was lower at 12.4%, and net profit at 31.4% during the period under review.

On the sectoral front, gems & jewellery companies recorded the highest yearon-year revenue growth of 44.2% in FY25, aided by rising prices of precious metals. Consumer durables companies followed with 39.6% top-line growth, and e-commerce companies at 26.7%. The highest net profit growth was reported by the pesticides companies at 173.5%, followed by medical services at 171.3% and metals at 92.2%.

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