For corporate India, financial year 2008-09 was like a trial by fire. The global credit freeze in September 2008 and the negative GDP growth across the developed world proved a great challenge. All past assumptions in the market place turned on their head. Indian companies, by and large, met the challenge of global headwinds with a resoluteness not seen before. At the end of it all, India Inc seemed to have passed the test by not only staying afloat but also by growing their top lines impressively. The leading FE 500 companies? list, ranked mainly by sales growth, shows that the toplines grew at a relatively high pace of 19.35% even though profitability declined across the board. However, bigger companies used their sheer scale to some advantage and managed to preserve bottomline growth too. We now feel doubly vindicated that our methodology in ranking the top 500 companies was changed some years ago, giving maximum weight to topline growth and substantially reducing the weightage accorded to market capitalisation. This may have stood us in good stead because in 2008-09 the stocks of most FE 500 rankers had crashed dramatically only to quickly recover within months after March 2009. So market cap becomes a somewhat fickle indicator, especially when global finance itself is going through a prolonged phase of volatility.
We are convinced that topline growth will truly reflect the aspirations and performance of Indian entrepreneurs who are currently in the process of growing their companies to global scale. Indeed, it is corporate India?s topline growth over the years that would truly measure the gradual shift of economic power towards India in particular and Asia in general. In this context, it is interesting to note that the top 15 among the FE 500 companies profiled this year will have two new entrants ? TCS and Tata Motors ? both of which are poised to build global scale in the next 5-10 years. Among the top 15 rankers by sales, profitability, asset size and market cap are IOC, RIL, ONGC, SAIL, Bharti Airtel, Tata Steel and RCOM. This year we also decided to plot the ten-year topline growth trend for the leading 100 among the FE 500 to give an idea of how these companies have fared over the past decade. The result was quite interesting: the top 100 companies have shown nearly 18% compounded annual growth in sales over the last decade. This means these companies have more than doubled in size every five years. If the trend continues for another two decades,
India may well dominate the list of global MNCs.