A buoyant economy, a resurgent nation, and that feeling of confidence sweeping corporate India. All these are reflected in this year’s FE 500. The India Inc juggernaut rolled on, flexed its muscles, and grew in girth. Nearly all the news was good news.
The companies that made it to the FE 500 list registered a 19.54 per cent surge in revenues for 2005-06 to touch a high of Rs 13,22,783 crore. The top ten, in terms of composite ranks, were slow on the draw, if compared to the overall list as a whole. The bigwigs saw sales grow at 18.52 per cent, lower than the collective growth. In absolute terms too, the top ten ended 2005-06 with a lower share: their aggregate sales as a percentage of the total FE 500 actually saw a marginal decrease from 32.98% in the year before to 32.69% in 2005-06. But this only reflects the trend that growth was broad-based and not skewed by outlier high-performers.
There are two new entrants to the top ten league: Bharti Airtel and Tata Motors. Indeed, Bharti’s ascent has been an astonishing one. Two years ago, it was ranked 114th. Last year, it jumped an amazing 100 ranks to clock in at 14th. And this year, it is the sixth finest company in the country! Tata Motors’ rise is a totally different story: stable, steady and solid. Two years ago, it was 11th; it dropped one rank to 12th last year, and is 10th this time round. There are no changes in the top three. Indeed, there has been no change in the last three FE 500s. Reliance Industries remains No 1, followed by public sector energy behemoths ONGC and Indian Oil.
The others in the top fifteen, in descending order of their composite ranks are National Thermal Power Corporation (NTPC), SAIL, Bharti Airtel, Tata Steel, BHEL, Gail (I), Tata Motors, ITC, Bharat Petroleum Corporation (BPCL), Larsen & Toubro, Hindalco and Wipro. In the top ten, Bharti’s entry has pushed Tata Steel and Gail (I) down one spot each.
The fastest growing industries in 2005-06 were breweries and distilleries, computers and software, electrical equipment, entertainment/ electronic media software, media, mining/minerals/ metals, retailing, sugar, textiles-silk, transmisson towers/equipment and transport-airlines/travel agencies.
The slowest growing sectors were cycles and accessories, pharmaceuticals-multinational, shipping, solvent extraction, steel-large, textiles-cotton/ blended, textiles-large and textiles-processing.
Gross profits of the FE 500 grew slower than sales and assets. Total gross profits rose from Rs 1,81,119 crore (on an annualised basis) in 2004-05 to Rs 2,01,671 crore in 2005-06—a 11.35 per cent jump.
Meanwhile, aggregate net worth of the FE 500 increased by 22.98 per cent from Rs 4,94,650 crore in 2004-05 to Rs 6,08,330 crore in 2005-06.
The story is a bit different for market capitalisation. Performance was not too impressive with aggregate market capitalisation of FE 500 corporates increasing by 10.61 per cent from Rs 22,55,822 crore on March 16, 2006 to Rs 24,95,058 crore as on March 16, 2007.Yet, that may be the harbinger of some good news for investors going forward. The scope for growth remains stellar.
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