Indian Oil Corp (IOC) has overtaken Oil and Natural Gas Corp (ONGC) to become India's most profitable state-owned company. IOC, which has for decades been India's biggest company by turnover, posted a 70 per cent jump in net profit to Rs. 19,106.40 crore in the financial year ended March 31, 2017. This was more than the Rs. 17,900 crore net profit ONGC posted in the fiscal year 2016-17, making Indian Oil the most profitable PSU, according to earning statements of the companies.
Billionaire Mukesh Ambani-led Reliance Industries retained the crown of being India's most profitable company for the third year in a row, posting a net Rs. 29,901 crore in the financial year 2016-17.
Tata Consultancy Services
Tata Consultancy Services, India's largest software services exporter, was the second most profitable company in the country, with a net profit of Rs. 26,357 crore.
Most profitable company
ONGC was for long India's most profitable company but lost the crown to private sector Reliance Industries and Tata Consultancy Services a couple of years ago. It has now been unseated as the most profitable PSU by Indian Oil.
In the previous fiscal year (2015-16), IOC had logged a net profit of Rs. 11,242.23 crore as compared to ONGC's Rs. 16,140 crore. While IOC chairman B Ashok attributed the profit growth to higher refining margins, inventory gains and operational efficiencies, ONGC chairman, and managing director Dinesh K Sarraf said the company lost Rs. 3,000 crore in net profit due to government's natural gas pricing policy that has made the business economically unviable.
Country's biggest gas producer
The BJP-led government had in October 2014 evolved a new pricing formula using rates prevalent in gas surplus nations like the US, Canada, and Russia to determine rates in a net importing country. Prices have halved to $2.48 per million British thermal unit since the formula was implemented. ONGC is the country's biggest gas producer, accounting for some 80 per cent of the 70 million standard cubic meters per day current output.