There’s change in the weather, and there’s change in the air! The panic of 2020 has given way to quiet confidence that businesses can be managed — despite Covid. Fear is receding, making way for exuberance. And India Inc. is perceptibly more assured in its outlook towards growth, expansion, hiring and capex. All of that reflects in corporate balance sheets captured so dramatically by Fortune India 500.

Guess what! India Inc. made a stunning comeback. The Fortune 500 companies reported their best ever net profit of ₹6.22 lakh crore in FY21, a remarkable 75% higher than FY20 when cumulative profit had fallen 22% to just ₹3.6 lakh crore. All this, despite a 2.4% decline in fiscal revenue. Surely, low base effect of the pandemic-stricken 2020 came into play. But corporate India, it seems, did more. It sliced costs, used benign interest rates regime to swap high-cost debt and even raised prices, where possible, to shore up the topline. Capex cycles, already at the bottom, helped with modest annual depreciation, contributing to the change in the air. India’s 15 largest sectors pared debt by over ₹1.7 lakh crore. Banking, oil & gas and IT services accounted for over 53% of the list’s profit pool for the year.

Fortune 500 companies that incurred losses shrank from 81 in FY20 to 68 in FY21. Their total cumulative losses reducing from a staggering ₹2.28 lakh crore to ₹1.38 lakh crore. V. Keshavdev captures the determined fightback in the lead story this issue.

Two organisations that stood out for relentless action in FY21 were Reliance and Adani groups, what former chief economic advisor Arvind Subramanian calls the ‘2A phenomenon’. The leader of the Fortune 500 pack Reliance Industries proved yet again why it remains India’s largest company. While the pandemic raged, businesses fell apart and balance sheets suffered, Jio Platforms Ltd. (JPL), the holding company of Reliance’s telecom and digital arm, and Reliance Retail raised an astounding ₹2.92 lakh crore in the first three months of FY22. Nevin John explains how that ensured chairman Mukesh Ambani met his commitment to make Reliance net debt free and also brought in enough resources to keep the Jio and Reliance Retail expansion on track.

P.B. Jayakumar captures how Adani group led by intrepid entrepreneur Gautam Adani has become the darling of the stock markets by following India’s infrastructure and renewables dream.

It will be a while before the optimism towards the future starts reflecting across the board. While investment revival seems imminent in industries such as pharma, metals, commodities, renewable energy, real estate, electrical and electronics, on the other hand, services sectors such as hospitality, tourism, travel & aviation which were subdued by the pandemic longer than others, may take a while before showing signs of life. Joe C. Mathew dives into what is fueling India’s capex cycle uptick.

Having shed flab, lean and hungry India Inc is on the marks for a 2003-like balance sheet expansion. But they face the big challenge of ensuring that irrational exuberance does not overwhelm rational decisions. Brace up for the booooom!

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