Top companies keep faith in rural market to tap rebound

Written by fe Bureau | Mumbai | Updated: Mar 31 2009, 06:37am hrs
The Financial Express score card of India Inc, FE 500, shows why the top companies have made it there. These are the companies that saw the slowdown building up as financial year 2007-08 rolled out. But the winners did more, they have kept up their pace of investments and have basically ploughed their investments into the rural markets to take advantage of the inevitable rebound.

RS Sharma, CMD of ONGC, which ranks number 2 in the FE 500 list, said, the rank basically stirs up even higher expectations--to perform better. He was also clear that higher investment was the best way to handle the economic downturn. We have Rs 60,000 crore of capex lined up and there is no way we will slow down on them.

It is not surprising, therefore, that the telecom sector has made its presence felt strongly in the list. Bharti Airtel and Reliance Communication reflect the potential that the sector has to offer. Bharti Airtel has, in fact, climbed a notch in the rankings. Similarly, in the FMCG sector, ITC has made it to the top 15 list, thanks to its growing rural footprint allied with a strong diversification into consumer related businesses.

The publication also captures the key financial parameters of the corporate sector. What sets the FE 500 list apart is its emphasis on fundamental performance like top line revenue figures and not the market capitalisation as reflected in the stock market. The latter tends to be more here and now that it often does not address the strength of the company.

Reflecting the difficult times, the expansion plans of all the top 15 companies is focused only on their core expertise, unlike the previous expansion plans that were more of an adventure than a well-planned venture. The other aspect of the winners has been their clear communication with their stakeholders about their plans.