With global growth slowing and local demand subdued, more and more companies seem to be losing their grip on profitability. As a result, a record 510 companies posted losses in FY19, against 502 in the year ago period and 496 in FY17. On an average, about 445 companies reported losses every year over the last 10 years, data sourced from Capitaline showed.
Loss-making companies have among them lost Rs 2 lakh crore in FY19 — a 15-fold jump over the last 10 years. In contrast, a clutch of 316 firms in FY10 had reported a combined loss of Rs 12,995 crore. Interestingly, state-owned companies with a combined net loss of Rs 64,106.25 crore account for a third of total loss made by all companies in FY19.
Even though FY16 also had a similar number of loss-making companies as in FY19, the cumulative losses in that year were less than half the aggregate losses reported in the year gone by. FY11 saw the lowest number of loss making companies in the last 10 years. With 59 firms, the textiles sector dominates the list of loss making companies in FY19.
It was followed by banks and finance with 56 entities. These three sectors between them account for about 23% of the total number of loss making companies. While the capital goods sector has 21 firms, others such as pharmaceuticals, steel and realty have 20 companies each with negative earnings.
Some of the prominent companies that reported large losses in FY19 include Tata Motors (Rs 28,826.23 crore), IDBI Bank (Rs 14,986.76 crore), Vodafone Idea (Rs 14,603.90 crore), Reliance Naval and Engineering (Rs 10, 926.55 crore) and Punjab National Bank (Rs 9,570.11 crore).
The analysis is based on 2,266 listed companies across sectors which are having financials for at least 10 years.
While companies like GTL Infrastructure, Siti Networks, Gujarat State Financial Corporation, RMG Alloy Steel, Soma Textiles, Cranes Software and Future Consumer have been reporting losses for the last 10 years, GMR Infra, Tata Teleservices Maharashtra, EMCO, Hindustan Construction Company, Network.18 Media, Quadrant Televentures, KSL and Indus, Vardhman Polytex, Alps Industries, E-Land Apparel, K-Lifestyle, etc did so for nine years since FY10.
It must be noted that many of the insolvency candidates, such as Videocon Industries (loss of Rs 5,264.04 crore in FY18), Jet Airways (Rs 636.45 loss in FY18) and Adhunik Metaliks (Rs 1,016.66 crore in FY18) are yet to declare their financial results for FY19.