2024-11-18 19:18:00
The dividends touched ₹30,226 crore in just over seven and a half months of this financial year, constituting 54% of the full-year target, showed the latest data by the Department of Investment and Public Asset Management (DIPAM).
But the bulk of the mop-up is expected in the crucial March quarter, pushing up the dividends to the targeted level, according to the person.
“If the global oil prices remain stable around $75 barrel, domestic oil companies will continue to make good profits and boost the dividend kitty. Power companies are also expected to do well,” said the person.- Banikinkar Pattanayak
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#Nonfinancial #CPSE #dividend #target #retained #FY25 #revised #estimate
How could the transition to renewable energy affect the long-term profitability of traditional power companies in relation to their dividend distribution?
**Interview with Financial Analyst, Rajesh Kumar**
**Editor:** Thank you for joining us today, Rajesh. The Centre is reportedly set to maintain its dividend target of ₹56,260 crore from non-financial CPSEs for the revised estimates of 2024-25. Given the current figures showing a 54% achievement of this target in just over seven months, how do you assess the likelihood of reaching this goal by the end of the fiscal year?
**Rajesh Kumar:** It’s certainly feasible, especially with the bulk of dividends typically being declared in the March quarter. Companies are generally hesitant to declare dividends early in the financial year, so the final figures will likely depend heavily on the performance in that last quarter.
**Editor:** You mentioned performance in the last quarter. It seems that the expected stability of global oil prices around $75 per barrel and the anticipated profits from domestic oil companies could play a significant role. How would potential fluctuations in oil prices impact this dividend target?
**Rajesh Kumar:** Absolutely, oil prices are a critical factor. If prices remain stable or even drop, we could see a reduction in profits for oil companies, which could affect their capacity to distribute dividends. However, if prices stabilize or rise, the profits will likely boost the dividends significantly. It’s a balancing act that investors will need to watch closely.
**Editor:** Alongside oil, power companies are expected to perform well. Considering the push for renewable energy sources and the global shift in energy dynamics, do you think traditional power companies will maintain their profitability in the long term to support this dividend target?
**Rajesh Kumar:** That’s an intriguing point. While traditional power companies are expected to do well in the short term, their long-term sustainability will depend on how quickly they adapt to the energy transition. Many are investing in renewables, but the pace of that transition will determine their profitability and ability to meet dividend expectations in the future.
**Editor:** Here’s a thought for our readers: As the government counts on dividends from these enterprises to meet fiscal targets, do you believe that reliance on CPSE dividends is a sound strategy or does it make the economy vulnerable in the face of fluctuating global markets? We invite you to share your views!