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BW Businessworld

Testing Times

The pandemic queered the pitch for India Inc in FY2020. And it’s going to test the mettle of corporates in the following fiscal as well

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The BW Real 500 List is one of India’s most comprehensive rankings of successful businesses. It takes into account assets created by companies and the income they generate on such assets. Asset creation is the solid backbone of any economy. Over the past few years, the focus of the managements has been on asset creation, which drives jobs and economic growth.

BW Businessworld partnered with TechSci Research for the study that to begin with takes into account only listed companies based on their turnover for the financial year 2019-2020 and ranks them basis their total income. Once the list of listed companies in each category (of top 500 non-financial institutions, top-10 banking institutions, top-20 non-banking financial companies) is prepared based on revenues, TechSci looks into remaining indicators for each company. These indicators include variables such as “Total Asset”, “Total Income” etc. “Total Asset”, for instance, is defined by TechSci as the total amount of assets owned by a company, while “Total Income” is the total amount of money that a company earns by selling its goods and/or services in the financial year under consideration. While terms like “Profit before Tax” or “Profit after Tax” are self-explanatory, the term “Reserves and Surplus” connotes “Capital Reserves”, “Retained Earnings”, “Fair Value Reserves”, “Hedging Reserves”, “Asset Revaluation Reserves”, “Foreign Currency Translation Reserves” and “Statutory Reserves” all lumped together.

The BW Real 500 ranking this year exhibits a considerable improvement in key balance sheet parameters including Income, Assets, and Profit and Loss. Indian companies are focusing on increasing growth rates and putting their assets to best use. Going by the present indicators, the BW Real 500 list is only set to grow — and swell. In size and scale, the top 50 companies in the BW Real 500 list account for more than 66 per cent of the total assets and income of all the 500 companies. On Total Income alone, they account for more than 62 per cent of all 500 companies.

The Mukesh Ambani-led giant Reliance Industries tops the list, yet again. This forward-looking institution is committed to innovation and customer service. Headquartered in Mumbai, the conglomerate is invested in businesses across energy, petrochemicals, natural resources, retail, textiles and telecommunications. While Reliance Industries comes out on top, oil and gas as a sector stands tall in the Top10 list of the BW Real 500 rankings with four companies firmly occupying the four spots after RIL. These include Indian Oil Corporation (Rank 2), Oil and Natural Gas Corporation (Rank 3), Bharat Petroleum Corporation (Rank 4) and Hindustan Petroleum Corporation (Rank 5). Others in the top 10 are Tata Motors (Rank 6), Rajesh Exports (Rank 7), Tata Consultancy Services (Rank 8), L&T (Rank 9) and Tata Steel (Rank 10). Some of the noticeable shifts in the rankings when compared to those of the last year include telecom giants Bharti Airtel (Rank 16), Vedanta (Rank 17), and Maruti Suzuki (Rank 18). All three companies were in the top 15 list in last year’s BW Real 500 Companies list.

Understandably, FY20 was a tough year because of the pandemic hitting in the last quarter. Fiscal 2020-21 is going to be even more challenging for the companies now. We can only hope that the current year turns out to be the year of revival for everyone. Keep your fingers crossed!