SAIL in Danger of Losing Maharatna Status; BHEL Shows Sharp Turnaround
BHEL's Turnaround Boosts Maharatna Prospects, SAIL Faces Uphill Battle
The Centre has placed two state-run giants — Bharat Heavy Electricals Limited (BHEL) and Steel Authority of India Limited (SAIL) — on a one-year watchlist after they failed to meet the profitability criterion required for retaining their coveted Maharatna status.
A high-level committee headed by Cabinet Secretary T.V. Somanathan reviewed the performance of Central Public Sector Enterprises (CPSEs) and found that while both companies continue to meet other eligibility norms, including average annual turnover above ₹25,000 crore, net worth exceeding ₹15,000 crore and significant international operations, they fell short of the mandatory profitability benchmark.
Maharatna is the highest classification granted to Central Public Sector Enterprises, providing enhanced financial and operational autonomy. Companies with Maharatna status can undertake large investments and strategic decisions without seeking frequent government approvals.
India’s 14 Maharatna CPSEs
The current Maharatna companies are:
- Bharat Heavy Electricals Limited (BHEL)
- Bharat Petroleum Corporation Limited (BPCL)
- Coal India Limited (CIL)
- GAIL (India) Limited
- Hindustan Aeronautics Limited (HAL)
- Hindustan Petroleum Corporation Limited (HPCL)
- Indian Oil Corporation Limited (IOCL)
- NTPC Limited
- Oil and Natural Gas Corporation (ONGC)
- Oil India Limited (OIL)
- Power Finance Corporation (PFC)
- Power Grid Corporation of India Limited (POWERGRID)
- REC Limited
- Steel Authority of India Limited (SAIL)
BHEL’s Remarkable Revival
Although BHEL has been placed on the watchlist, the engineering major has demonstrated a dramatic turnaround during FY26.
The company reported a 199.7 percent jump in annual profit after tax (PAT) to ₹1,600 crore compared to ₹534 crore in FY25. Revenue from operations increased 19.2 percent to ₹33,782 crore, while fourth-quarter PAT surged 155.8 percent to ₹1,290 crore. Q4 revenue rose nearly 37 percent to ₹12,310 crore.
| Parameter | FY26 | Growth |
|---|
| Revenue from Operations | ₹33,782 crore | +19.2% |
| Profit After Tax (PAT) | ₹1,600 crore | +199.7% |
| Q4 FY26 PAT | ₹1,290 crore | +155.8% |
| Q4 Revenue | ₹12,310 crore | +36.9% |
| Order Inflow | ₹75,000 crore | Strong growth |
| Order Book | ₹2.4 lakh crore | Record level |
BHEL’s revival is further reflected in its robust order inflow. The company secured fresh orders worth around ₹75,000 crore during FY26, taking its total order book to nearly ₹2.4 lakh crore, one of the highest in its history.
These numbers suggest that while BHEL may have missed the Maharatna profitability benchmark on a three-year average basis, its business fundamentals are strengthening rapidly. If the current trajectory continues, the company appears well-positioned to retain its Maharatna status.
Why SAIL Faces Greater Discomfort
While both companies are under scrutiny, the challenges confronting SAIL appear significantly more complex.
SAIL reported improved financial performance in FY26, with revenue crossing ₹1.10 lakh crore and net profit rising to ₹3,233 crore, a growth of over 50 percent compared to the previous year. However, despite this improvement, the steel giant remains well below the average annual profit threshold of ₹5,000 crore required for Maharatna status.
Unlike BHEL, whose prospects are buoyed by a strong order book and growing demand in the power sector, SAIL remains heavily exposed to cyclical fluctuations in steel prices, volatile raw material costs and rising competition from private steel producers. Global steel market uncertainties continue to put pressure on margins.
Steel Authority of India Limited also faces concerns on the workforce front. Reports of aggressive manpower rationalisation and efforts to reduce contract labour deployment by nearly 40 percent have generated unease among employees and trade unions. Critics argue that such measures could adversely affect employee morale, productivity and industrial relations at a time when SAIL needs maximum operational efficiency to improve profitability.
Industry observers point out that SAIL’s challenge is not merely financial. The company must simultaneously improve profitability, execute capacity expansion plans, maintain market share, enhance productivity and preserve workforce motivation. Failure on any of these fronts could further weaken its position.
A Crucial Year Ahead
The one-year watch period will be a critical test for both Maharatna companies. While BHEL’s sharp turnaround and record order pipeline have strengthened its case for retaining Maharatna status, SAIL faces a much steeper climb.
For SAIL, the task extends beyond improving financial numbers. Restoring sustained profitability while maintaining workforce confidence and operational efficiency may ultimately determine whether the steel major continues to remain among India’s elite public sector enterprises.
