India Best Public Sector Undertaking 2018


PSUs: Playing A Vital Role In Nation-Building
Dalal Street Investment Journal is pleased to bring to you the much-anticipated DSIJ PSU Award. Since 2009, the birth year of this flagship issue, we have identified the efforts and the brilliant achievements of the PSUs in India and we yet again present to you our celebrated PSU Journal.

The PSUs have played a huge part in nation-building. They are strategic actors in the nation’s economy that provide essential goods and services and hold a dominant market position in some of the core sectors of the economy, such as Banking, Power, Steel, Mining, Petroleum and Transportation. They have created ample job opportunities, built strong industrial base, developed infrastructure and have been at the forefront of export promotion and import substitution. The PSUs have been assigned heavy responsibility of discharging social obligations such as promotion of education, skill-development, reducing income inequalities, etc. and we can definitely say that the PSUs have been playing their part adequately since Independence.

On the economic front, all PSUs have played a vital role in scripting the economic story of India. The Gross Domestic Product (GDP) growth is projected to accelerate moderately to 7.5 per cent in the FY2019-20, according to the World Economic Outlook of IMF. The PSUs have stood strong in the toughest of times and have continued to give to the economy dutifully. With the accelerating rate of GDP, the PSUs have a crucial role to play. The PSUs have been assigned the tough job of managing the national resources of the country and it is quite evident that they have played their part extremely well and that needs to be commended and cherished.

We have had the pleasure of interacting with India’s foremost business leaders who bring forth their views to our readers. We venerate and salute the leaders of the valuable corporations of India who have been doggedly striving to push the growth of the PSUs. In this issue, we share with you the views and insights of the stalwarts of the PSU world regarding their companies and their role for the economy. Going ahead, we hope to see the PSUs reaching their full potential and hogging the limelight with their performance.

I would like to appreciate and thank all the participants for contributing and giving us the opportunity to interact yet again and also expect them to continue doing so for years to come. We would always strive to present all the relevant information each time. None of this would have been possible without the continued support of all the stakeholders. Thank you for making this issue so special.

Yogesh Supekar
Deputy Editor

The Drivers Of Socio-Economic Change In India

The World Bank in its latest report on South Asia has said that India’s Gross Domestic Product (GDP) growth is expected to accelerate moderately to 7.5 per cent in FY2019-20. Its data for the first three quarters suggested that the growth has been broad-based. The industrial growth expanded to 7.9 per cent. Nevertheless, the agriculture growth was robust at 4 per cent. Expressing confidence over growth of the Indian economy, Finance Minister Arun Jaitley has said the country is expected to become the third largest economy in the world by 2030 with Gross Domestic Product (GDP) touching $10 trillion, helped by consumption and investment growth. He added that the GDP would be $5 trillion by 2024. Currently, the size of the Indian economy is about $2.9 trillion. We can expect multiple sectors to contribute to the economic growth of India. The Central Public Sector Enterprises (CPSEs) have contributed a fair share on the economic front.

The public sector enterprises have been set up to cater to the macroeconomic objectives of higher economic growth, self-sufficiency in production of goods and services and establishing a long term equilibrium in balance of payments. In 1947, post India attaining Independence, India had just five CPSEs with an investment of merely Rs 29 crore. Today, India has 339 CPSEs with a total investment in excess of Rs 13 lakh crore as on March 31, 2018.

The public sector enterprises formed the backbone of industrial development of the country. The role of the PSEs have been very dynamic in nature. Initially, their role was to help create the much-needed industrial base and infrastructure, apart from bringing about price stabilisation and socio-economic development. The PSEs were also engines of growth in true sense of the term. The PSEs contributed greatly to job creation by adopting labour-intensive techniques. However, with unveiling of economic liberalisation PSEs The Drivers Of Socio-Economic Change In India in 1991, the PSEs’ role changed as they geared themselves to take on competition, both domestic and global. But none can deny the fact the PSEs played a key role all along in nation-building as they helped in removing regional imbalances, development of infrastructure, townships and remote areas.

The important indicators to measure the performance of PSEs is the share of PSEs in the GDP, gross domestic capital formation, employment generation as well as their role as prices deflators for the sector. The CPSEs are strategic actors in the nation’s economy that provide essential goods and services and hold a dominant market position in core sectors such as power, steel, mining, petroleum, transportation and logistic services. CPSEs are also present in the competitive markets of telecommunications, IT, etc. The CPSEs face a high pressure coming from both the government and the competitive environment in their businesses to achieve the set goals efficiently.

Sector Wise Performance

The CPSEs have been classified into four sectors, namely, agriculture, mining & exploration, manufacturing and generation and services. Taking into consideration the public sector’s return on net worth (RONW), it has been observed that it is the highest in the mining and exploration sector at 14.77 per cent, followed by manufacturing, processing and generation at 14.34 per cent and the services sector at 5.04 per cent. Unfortunately, the agriculture sector has presented a negative RONW of 39.30 per cent. The overall return on net worth of all CPSEs taken together was 11.58 per cent during the year 2017-18.

The return on assets (ROA) is higher in the mining & exploration sector at 6.94 per cent, closely followed by manufacturing, processing & generation sector at 6.94 per cent and services sector at 0.99 per cent. Again, the agriculture sector’s ROA was negative at 5.06 per cent.

During the year 2017-18, in terms of net profit margin (NPM), the mining & exploration sector topped all other sectors, reporting NPM of 18.16 per cent, followed by manufacturing, processing & generation at 5.07 per cent, while the services sector NPM came in at 3.60 per cent. The agriculture sector was again lagging as its margins were negative.


The CPSEs provide huge power to the government, which allows them to intervene in the economy directly or indirectly to attain the anticipated socio-economic objectives. If we ponder upon the rural growth story, we can see that it could not have been possible without the number of basic infrastructure services offered by the public sector in the rural areas. The sector is deeply ingrained in the domestic economy and business operations of PSEs are now enmeshed in the common man’s life. With the CPSEs providing employment to around 10.88 lakh workers in 2017-18 and the total contribution of the CPSEs to the Central exchequer through excise duty, GST, corporate tax, etc., amounted to Rs 3 lakh crore in 2017-18. Also, the Corporate Social Responsibility (CSR) expenditure of the CPSEs stood at Rs 3,000 crore in the year 2017-18. These are just some of the vital contributions made by the CPSEs to the economy in FY18.

Given India’s socio-economic and demographic realities, it is quite difficult to think of the Indian economy without the public sector enterprises. To a large extent, PSEs as a whole, have succeeded in attaining the goals that were expected of them. We can safely say that the Indian economy would lose its essence without the public sector. However, there are some pertinent issues that need to be addressed pertaining to the operational inefficiencies and bureaucratic limitations which hinder the smooth running of the PSEs. This need has been recognised and Prime Minister Narendra Modi will be chairing a meeting of the heads of top state-run enterprises to chalk out a strategy for the smooth functioning and redefining the role of CPSEs to realise the vision of a ‘New India’.

PSU Ranking Methodology

We follow a ranking methodology for PSUs based on comprehensive financial parameters. We have evaluated data only of Maharatnas, Navratnas and Miniratnas, among CPSEs. Again, these companies are divided into manufacturing and non-manufacturing, depending on their areas of operation.

We ranked and awarded companies in three categories – Maharatna/ Navratna/ Miniratna of the year, Most efficient Maharatna/ Navratna/ Miniratna and Fastest growing Maharatna/ Navratna/ Miniratna.

For the first category of award, the main criteria was the size of the company relative to its peers in the category. The basic parameters to assess the winner companies are in terms of Balance Sheet size, net sales and profitablilty. These parameters are used to evaluate the companies in terms of size. To calculate the final rank, major weightage (30%) is given to Operating Profit and Net Sales each and then the remaining weightage (20%) is given towards Balance Sheet size and Net profit. The composite ranking provides the basis of deciding the winner.

For selection of the most efficient companies, we evaluated the operational efficiency of the company. Hence, we have considered parameters like profitability per employee, cost of employee as against sales, working capital efficiency and leverage ratio. These parameters reflect the level of efficiency the companies are delivering. Equal weightage has been given to all the four parameters to arrive at the final ranking. For selection of the fastest growing companies, the emphasis is on the growth achieved during the last five years, as compared to the peers. For this, we consider the growth in sales, net profit and operating profit. To weave in the operational performance compared to the capital invested, we also evaluate return on net worth and return on capital employed. The compounded annual growth for last 5 years relatively depicts a true picture of the company in terms of its overall growth. All individual parameters are given appropriate equal weightage to calculate the final rank.


We evaluate banks and assign ranks using operating profit per employee, growth in operating profit and balance sheet size. Operating profit per employee shows efficiency of banks, growth in operating profit shows growth and balance sheet size shows the size of the banks. For the calculation, higher weightage (60%) is given to operating profit per employee and the remaining weightage is equally distributed between growth in operating profit and balance sheet size.


In insurance, we are keen to see that the growth in premium is balanced with the growth in claims. Also, we rank the companies to reassure that the best Balance Sheet is rewarded so that the liabilities are sufficiently provided by the reserves and balances.

Click Here to Download PSU Ranking

List of India's Best PSUs 2018 Winners

Category Winners

Maharatna Manufacturing

Highest Dividend Yield Maharatna  of the Year (Manufacturing) Indian Oil Corporation Limited
Fastest Growing Maharatna of the Year (Manufacturing) Bharat Heavy Electricals Limited
Most Efficient Maharatna of the Year (Manufacturing) NTPC Limited
Highest 3 Years CAGR Sales Growth Maharatna of the Year GAIL (INDIA) Limited

Maharatna Non-Manufacturing

Maharatna of the Year ( Non-Manufacturing) Oil & Natural Gas Corporation Limited
Most Efficient & Fastest Growing Maharatna of the Year (Non-Manufacturing) Coal India Limited

Navratna Manufacturing

Fastest Growing Navratna of the Year (Manufacturing) Hindustan Petroleum Corporation Limited
Most Efficient Navratna of the Year (Manufacturing) Bharat Electronics Limited
Highest Cost Efficiency in FY 17-18 Navratna of the Year Rashtriya Ispat Nigam Limited

Navratna Non – Manufacturing

Navratna of the Year (Non-Manufacturing) Power Grid Corporation of India Limited
Fastest Growing & Highest Growth in RONW (Over Last 5 Years) Navratna of the Year (Non-Manufacturing) National Aluminium Company Limited
Most Efficient Navratna of the Year (non -Manufacturing) NMDC Limited
Highest Employee efficiency Navratna of the Year (Non-Manufacturing) Power Finance Corporations Limited
Highest Wealth Creator - Market Returns Navratna (Non-Manufacturing) REC Limited
Highest Order Book Navratna (Non-Manufacturing) NBCC Limited

Miniratna Manufacturing

Miniratna of the Year (Manufacturing) Mangalore Refinery & Petrochemical Limited
Most Efficient Miniratna of the Year (Manufacturing) Bharat Dynamics Limited
Fastest Growing Miniratna of the Year (Manufacturing) Numaligarh Refinery Limited

Miniratna Non-Manufacturing

Miniratna of the Year (Non-Manufacturing) Mahanadi Coalfields Limited
Most Efficient Miniratna of the Year (Non-Manufacturing) Hospital Services Consultancy Corporation (India) Ltd.
Fastest Growing Miniratna (Non-Manufacturing) Ed.CIL (India) Limited
Turaround stock National Film Development Corporation Limited


Best PSU Bank Indian Bank
Operating Profit Efficiency Andhra Bank
Highest Growth in Net Interest Income Canara Bank
Highest Wealth Creator - Market Returns State Bank of India


Insurer of the Year (Highest Premium Collection) General Insurance Corporation of India
Highest Profitability Insurance Company The New India Assurance Co. Ltd.
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