The net profit margin measures the profits that a company generates as a percentage of its revenue. It helps investors and other stakeholders to assess if a company’s management is generating enough profit from its sales and whether costs are in control. This metric is one of the most important indicators of a company’s financial situation.
Here are a few large-cap PSU stocks with a net profit margin greater than 25 percent:
Power Finance Corporation
Power Finance Corporation is a systemically important non-deposit-taking NBFC registered with the Reserve Bank of India (RBI) as an infrastructure finance company. It is a Maharatna company engaged in extending financial assistance to the Indian power sector. The President of India holds a 55.99 percent stake in it.
With a market capitalization of ₹ 72,021 crores, Power Finance Corporation is a large-cap company. It has a high net profit margin of 27.30 percent. The company has a low return on equity of 8.80 percent, but a high dividend yield of 4.86 percent. Its shares closed at ₹ 257.40 apiece on Friday.
Power Grid Corporation of India
Power Grid Corporation of India is a Maharatna CPSU and India’s largest electric power transmission company. The company moves large blocks of power from the central generating agencies and areas that have surplus power to load centres within and across regions. It is under the administrative control of the Ministry of Power, Government of India. The President of India holds a 51.34 percent stake in it.
With a market capitalization of ₹ 1,72,398 crores, Power Grid Corporation of India is a large-cap company. It has a high net profit margin of 34.00 percent. The company has a low return on equity of 12.81 percent, but a high dividend yield of 5.97 percent. Its shares closed at ₹ 252 apiece.
NHPC
NHPC, a Mini Ratna category I public sector utility, is the Government of India’s flagship hydroelectric generation company. It is involved in the generation and sale of bulk power to various power utilities. In addition, it provides project management, construction contracts, consultancy assignment services and trading of power. The President of India holds a 70.95 percent stake in it.
With a market capitalization of ₹ 51,230 crores, NHPC is a large-cap company. It has a high net profit margin of 39.97 percent. The company has a low return on equity of 7.87 percent, but a good dividend yield of 3.63 percent. Its shares were trading at ₹ 50.25 apiece.
Written by Simran Bafna
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