Assets of top 20 industry houses up 15.1% in 2000-01

Pradip Kumar Dey, FE Research Bureau

The total assets of 20 top industrial houses have showed a growth rate of 15.1 per cent as at the end of March 2001 over the corresponding level in March 2000.

Gross sales by these houses also increased by 33.4 per cent during the same period. Profit before tax (PBT) increased by 18.0 per cent in 2000-01 over the level in 1999-00.

In absolute terms, the total assets of these houses was Rs 2,41,514 crore in March 2001 compared with Rs 2,09,835 crore in March 2000. Similarly, gross sales and PBT were Rs 1,86,812 crore and Rs 12,377 crore, respectively during the same year.

While the house of Reliance topped the list with assets of Rs 50,486 crore in 2000-01, the Oswal A Group came last with Rs 4,388 crore. Of the remaining houses, Tata, Birla KM, Essar, O Jindal, RP Goenka, L&T, Mittals, ITC, Hind Lever, Bajaj, Mahindra & Mahindra, Videocon, Thapar and Birla BK had assets exceeding Rs 5,000 crore each.

The ratio of PBT to total assets and gross sales are calculated at 5.1 per cent and 6.6 per cent respectively, on the basis of aggregate figures during 2000-01 for the 20 largest business houses.

The maximum change on year was shown during 2000-01 by the Reliance group (69.2 per cent) in assets and in gross sales (186.4 per cent) and Birla BK in profit before tax (81.0 per cent).

The rankings were based on data of selected companies belonging to the 20 large industrial houses during 2000-01.

For some houses, the latest balance sheets of selected companies were not available. The previous year’s figures were used to arrive at the figures for 2000-01.

In the case of profitability ratio, profit before tax to gross sales and profit before tax to assets have been considered.

The study compares the percentage increase in the total assets, gross sales and profit before tax of 20 top industrial groups for two years,that is 1999-00 and 2000-01.

The maximum increase in assets during 2000-01 was recorded by the Reliance Group (69.2 per cent) followed by Subhash Chandra (18.6 per cent), ITC (16.0 per cent), Tata (14.0 per cent), Oswal A (13.1 per cent) and Videocon (10.7 per cent).

The assets of the house of Reliance and Tata exceeded 14 per cent each of the total of the top 20 in all the two years. Birla KM and Essar accounted for slightly more than seven per cent. OP Jindal, RP Goenka and L&T accounted for more than four per cent but less than seven per cent. The other houses had a share of less than four per cent but more than 1.8 per cent each in total assets.

In the house of ITC, there were 9 major companies - ITC, ITC Agro-Tech, ITC Bhadrachalam, Bay Islands Hotel, All India Tobacco, ITC Hotels, Punjab Anand Lamp, Shrinivasa Resorts and VST Ind. Of the 9 companies, the maximum change on year (23.3 per cent) was recorded in assets of Shrinivasa Resorts during 2000-01. The second highest growth in assets was witnessed in the case of ITC (21.4 per cent) during the same period.

Similarly, the highest growth in sales was seen in the case of Reliance (186.4 per cent) followed by Mittals (38.4 per cent), Subhash Chandra (19.9 per cent), OP Jindal (19.6 per cent), RP Goenka (19.6 per cent), Birla BK (17.1 per cent), BSES (14.9 per cent) and Birla KM (12.9 per cent).

Reliance, Tata, Birla KM, ITC and Hind Lever accounted for more than six per cent each of the total gross sales of the top 20.

The remaining houses had a share of less than six per cent each in all the two years in total gross sales.

In the OP Jindal Group, there were six major companies - Jindal Iron & Steel, Jindal Vijaynagar Steel, Monnet Industries, Saw Pipes, Shalimar Paints and Jindal Strips. Of these,the maximum change on year in gross sales was shown by Jindal Vijaynagar Steel (44.8 per cent) during 2000-01. The maximum growth in PBT was witnessed in the case of Birla BK (81.0 per cent) followed by Reliance (76.7 per cent), Subhash Chandra (43.8 per cent),ITC (37.2 per cent) and Birla KM (24.7 per cent). Loss at PBT level during 2000-01 and 1999-00 was shown in the case of Essar, OP Jindal, RP Goenka, Mittals and Thapar. In the case of Oswal A, the PBT was negative during 2000-01 only.

The profit before tax of Reliance, Tata, Birla KM, ITC Hind Lever accounted for more than 10 per cent each of the Group total for all the two years of the study. The remaining houses had a share of less than or equal to eight per cent.

In the house of Birla BK, there are seven major companies - Bharat Gen & Tex, Century Enka, Century Textiles, ECE Ind, Jayshree Tea, Kesoram Ind and Mangalam Cement. Of these, the maximum growth rate in profit before tax during 2000-01 was recorded by Century Textiles (1,058.0 per cent).

The ratio of profit before tax to total assets increased significantly from 1999-00 to 2000-01 in the case of Reliance (8.32 per cent to 8.69 per cent), Birla KM (8.20 per cent to 9.90 per cent), ITC (18.41 per cent to 21.76 per cent), Birla BK (1.74 per cent to 3.06 per cent) and Birla KK (2.51 per cent to 3.29 per cent).

On the other hand, the ratio of profit before tax to gross sales has also increased from 1999-00 to 2000-01 in the case of Birla KM (12.52 per cent to 13.83 per cent), ITC (12.02 per cent to 15.59 per cent), Hind Lever (11.52 per cent to 13.30 per cent) and Subhash Chandra (28.76 per cent to 34.47 per cent).

In the house of Reliance, the ratio of PBT to total assets increased from 1999-00 to 2000-01, but the ratio of PBT to gross sales declined from 1999-00 to 2000-01. Thus, among the top 20, Reliance, ITC, Subhash Chandra and Videocon did better with reference to growth in assets, gross sales and PBT during the study period.