February 25, 2010 12:30:24 am
Tracking the growth of the top 100 companies of India shows a game-changing phenomenon. In the last decade,companies have more than doubled their size every five years. This means,if the trend continues and by all indications it will for another two decades,the Indian list could dominate the global list of multinationals. This is typical of the sort of startling data the latest FE 500 throws up.
The compilation tracks the year 2008-09,one of the most challenging 365 days for India Inc,coming as it did after two years of heady growth. Companies faced both a shortage of liquidity and a collapse in demand but rose to the occasion,tightening their belts,keeping lean inventories and using cash sparingly.
The three months to December 2009,were probably one of the most difficult in Indian corporate history,the low point being the 2 per cent contraction in the index of industrial production in December. Companies were compelled to resort to production cuts,layoffs or wage freezes as they struggled to generate cash flows and stay profitable. To their credit,they came through with flying colours helped by a rebound in the home market and large doses of stimulus from the government.
Indeed,the financial performance of companies during the year doesnt betray the extent of the pain. A glance at the numbers for the top 500 companies,showcased in FE 500,shows that sales for the year grew by just under 20 per cent,indicating reasonably good volumes growth,some amount of pricing power and also some impact of inorganic activity.
The highlight of the charts is,of course,the performance of the top 100 companies from the basket of 1999-2000 (ranked by sales). Their aggregate net sales grew by a compounded 18 per cent in the nine years between 1999-2000 and 2008-09. While companies such as Reliance Industries,which grew at a compounded 30 per cent and Infosys,which grew at a compounded 42 per cent,led the way,the new entrants to the top 15 companies like Tata Motors and TCS stood out.
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