Fortune 500 India: When The Going Gets Tough…

SANTA CLAUS might be mythical, but in recent years, India Inc.’s numbers have begun to resemble a sack of real goodies, brimming with the glitter of growth and resilience. Unlike the metaphorical gifts delivered with jingling bells and reindeer sleighs, the Fortune 500 India companies have provided the hard, quantifiable reality of economic heft, steadily growing their absolute income and profits over the years.

The analogy is fitting, and here’s why: India Inc.’s profit pool as a percentage of gross domestic product (GDP) has climbed to a 13-year high, driven by robust bottom-line improvements in financials, energy, and automobile firms. The profit-to-GDP ratio of the marquee list rose to 4.7% in FY24, up from 4.06% in the previous year. The cumulative profit pool grew at a remarkable 27.5% year-on-year (YoY) in FY24, reaching an all-time high of ₹13.95 lakh crore even as the cumulative revenue (total income) of the universe has hit a record ₹157 lakh crore.

This performance is particularly striking when placed in context. Profit growth had cooled to 9.7% YoY in FY23, following a record 75% surge in FY21. Yet, the headline YoY growth figures only tell part of the story. The real standout is the absolute profit pool, which, after entering the double-digit club last year at ₹10.94 lakh crore, has expanded further in FY24. It’s a testament to the enduring resilience and adaptability of corporate India.

While the numbers are outstanding, Neelesh Surana, CIO of Mirae Asset Mutual Fund, offers a more nuanced view. “Post-Ukraine, surging commodity costs led to margin contractions, which inevitably impacted overall profitability, which, in turn, got reversed with commodity prices stabilising. Besides, the banking sector enjoyed a Goldilocks moment, with decent top-line growth, healthy margins, and low levels of delinquencies creating a near-perfect environment for performance,” says Surana, who manages close to ₹1.5 lakh crore in equity AUM.

What comes as the icing on the cake is the fact that the list is now home to a record billion-dollar revenue companies with 283 companies commanding $1.7 trillion in total income and $154 billion in cumulative profits. What is also impressive is that the number of dollar-billion profit-generating companies stood at 37 with $107 billion in cumulative profit. It’s also pertinent to note that despite a near 46% depreciation in the rupee since 2010, this year’s listing has the highest number of billion-dollar companies both in terms of total income and profits.

A further slicing of the universe was done by Fortune India to see how many constant companies have held onto their positions in the marquee list and the results were impressive enough — 220 companies have managed to stay put in the list over the past 15 years, demonstrating the resilience that India Inc. has managed to show in recent years. Of these, 162 companies have over $1 billion in revenue and 33 companies also enjoy over $1 billion in profits. That just goes to show that of the overall $1 billion profit-making companies (37), the lion’s share of profits continues to be driven by the constant set.

That the market has been quite generous towards the 283 $1 billion revenue generators is evident from the list, with 218 companies commanding a cumulative market cap of $3.5 trillion. In fact, of the 283 companies, it’s the constant set of companies (150) that corner the maximum share in valuation at $2.9 trillion.

“The market has become increasingly generous — there hasn’t been a significant drawdown in MF flows for the past eight years. It’s been a sustained bull run. Further, in the last four to five years, we’ve seen a wave of high-quality large IPOs. Companies are not only getting bigger but also more differentiated, and the steady supply of new papers has only added to the vibrancy of the market,” says Surana.

Big Getting Bigger

The Fortune 500 India list vividly illustrates the maxim ‘the big get bigger.’ As of 2024, the concentration of income and profit among the largest companies is striking. The top 10 companies alone contribute a commanding 35% of the cumulative total income, while the next 15 account for 16%, and the following 25 companies add another 13%. Together, the top 50 companies dominate the cumulative total income with a hefty 64% share, leaving the remaining 450 to account for the rest.

The narrative is equally concentrated when it comes to cumulative profit. The top 10 contributors hold 35% of the total profit pool, the next 15 capture 20%, and the subsequent 25 control 15%. This means the top 50 profit-generating companies collectively own 71% of the cumulative profit, making it clear that the largest players dominate not just the income pie but also the profit pool.

This concentration underscores the growing heft and influence of India’s largest corporations, highlighting their pivotal role in driving the country’s corporate growth story.

Saurabh Mukherjea, founder and CIO of Marcellus Investment Managers, too, has expounded on the development. In his latest book, Behold the Leviathan: The Unusual Rise of Modern India, Mukherjea mentions that larger corporations are going into another orbit of profitability altogether at the expense of smaller players. “The nation has gone from being a village-like economy (with poor connectivity between various regions in the country) to big-city integration with the village (or invasion of the village, depending on your point of view) as connectivity improved. On the bigger, pan-India canvas in the aftermath of this integration, more-efficient companies have grabbed profit share and, in doing so, have pulled down profits for their less-efficient competitors,” says Mukherjea.

How that story will pan out in the years to come would be the subject of introspection, even as in recent years the Competition Commission of India has been active with an M&A wave slowly building up across India Inc.

Nonetheless it’s an interesting assortment of companies and sectors that have come to dominate the Fortune 500 India list.

The Movers And Shakers

The 2024 list presents a fascinating narrative of corporate dominance, resilience, and transformation, with Reliance Industries maintaining its throne at #1, boasting revenues of ₹9,22,391 crore, a testament to its unshakeable position as India’s corporate leader. Meanwhile, state-owned Life Insurance Corp. of India climbed to #2, swapping spots with Indian Oil Corp., which slipped to #3 following an 8.52% revenue dip, while ONGC held firm at #4, and State Bank of India surged into the #5 spot, driven by an impressive 25.6% growth in total income to ₹5,94,575 crore, the only company in the top 5 to enjoy a high double-digit growth in top-line.

The year also witnessed an influx of 29 new entrants, collectively contributing ₹1,85,614 crore in revenue, led by spectacular debuts, including Swan Energy at #416, with a jaw-dropping 240.80% revenue growth. Ola Electric Mobility, debuting at #398, underscored the growing momentum of the electric vehicle revolution in India. These entrants, spanning sectors, including renewables, EVs, and new-age tech, highlight a dynamic shift in the Indian corporate landscape.

Among the most notable movers, RattanIndia Power stole the spotlight as the biggest rank gainer, leaping 325 spots to #171, while Motilal Oswal Financial Services climbed 135 places to #318, and ITD Cementation India surged 88 ranks to #301, showcasing the strength of infrastructure and financial services.

In contrast, Gujarat Narmada Valley Fertilizers & Chemicals faced the sharpest decline, plummeting 73 spots to #281, amidst a 21.12% revenue contraction, followed by Allcargo Logistics, which dropped 67 places to #186, and Suzlon Energy, down 87 ranks to #338, reflecting struggles in logistics and renewable energy sectors.

The banking sector emerged as a standout performer, with Kotak Mahindra Bank climbing to #34, posting a 38.35% growth, while IDFC First Bank surged to #72 with a 33.32% rise, and Jana Small Finance Bank leapt 37 places to #447, reinforcing the sector’s robust growth story. Renewable energy and electric mobility also surged ahead, with Waaree Energies climbing 81 spots to #195, and Ola Electric Mobility and Adani Green Energy making strong impressions, underscoring a shift toward sustainable solutions in India’s corporate ethos.

Among the fastest-growing companies, Remedium Lifecare emerged as the standout, debuting at #487 with an unparalleled 866.72% growth, followed by RattanIndia Power (which skyrocketed into the rankings with an extraordinary revenue growth of 312.23%), and Swan Energy, whose exceptional growth rates of over 240% placed them among the year’s biggest winners. However, the challenges were equally stark, with legacy industries such as fertilisers and chemicals witnessing headwinds, as firms, including Chambal Fertilisers slipped 51 ranks to #137, grappling with a 30.75% revenue dip, and Deepak Fertilizers fell 83 places to #273, amidst a 25.09% decline, signalling a turbulent year for traditional players.

The X Factor

What differentiates the men from the boys is evident in the list that unveils a fascinating achievement: Only 21 companies have consistently grown their top-line for the past 15 years from 2010 to 2024 . Leading this elite group is State Bank of India, which has achieved steady growth, scaling from ₹1,35,217 crore in 2010 to ₹5,94,575 crore in 2024, maintaining double-digit growth even during challenging financial periods, thanks to robust lending strategies and a growing banking footprint. Similarly, HDFC Bank has displayed extraordinary momentum, with revenues catapulting from ₹20,270 crore in 2010 to ₹4,07,995 crore in 2024, fuelled by its expansion in retail banking, digital innovation and the recent merger with HDFC.

The IT sector has shown consistent strength, with giants such as Tata Consultancy Services (TCS) and Infosys maintaining double-digit growth rates by capitalising on the global shift towards digital transformation. TCS’s top-line surged from ₹30,496 crore in 2010 to ₹2,45,315 crore in 2024, and Infosys followed suit, growing from ₹23,735 crore to ₹1,58,381 crore over the same period, supported by their global market leadership and innovation in tech services.

Among other consistent performers is Asian Paints, which increased its revenue from ₹7,209 crore in 2010 to ₹35,952 crore in 2024, riding on India’s booming real estate and construction sectors. Likewise, Pidilite Industries showcased remarkable growth, climbing from ₹2,256 crore to ₹12,397 crore during this span, driven by its diverse product portfolio and focus on rural markets.

Notable contributors from the pharmaceutical and FMCG sectors include Cipla, Berger Paints, and Colgate-Palmolive, each achieving steady growth through product innovation, strategic market penetration, and export-driven revenue. Cipla, for instance, expanded its top-line from ₹5,992 crore in 2010 to ₹26,458 crore in 2024, while Berger Paints and Colgate-Palmolive have been standout performers in consumer-driven sectors.

The financial sector saw stalwarts such as Axis Bank, Kotak Mahindra Bank, and Federal Bank maintaining their growth trajectories. Axis Bank’s total income surged from ₹15,632 crore in 2010 to ₹1,37,989 crore in 2024, leveraging its diverse banking portfolio and robust credit growth, while Federal Bank doubled down on retail and SME banking.

Finally, the agro and dairy space was represented by Hatsun Agro Product, which grew steadily from ₹1,160 crore in 2010 to ₹8,760 crore in 2024, fuelled by India’s appetite for dairy products and its expansion into rural markets.

These 21 companies have not only achieved remarkable financial growth but also demonstrated an unwavering ability to adapt to market dynamics, regulatory changes, and technological advancements.

So Far So Good

Just as the Grinch is supposed to play spoilsport with the Xmas festive cheer, so is the case with India Inc. In the current fiscal, with a majority of companies missing earnings estimates and putting up a dismal top-line performance, there is a strong possibility that the next year could be a tough one for the Fortune 500 India constituents.

Shaun Cochran, head of research at CLSA, believes that while India will continue to flourish, growth will not be as feverish. “India will outgrow China on a nominal GDP basis. That’s almost a given because India’s population will grow, and China’s population will contract. But India is probably capped at its fundamentals now,” says Cochran.

It could well be that this could possibly be the peak performance of India Inc. With sales momentum tapering, profitability growth, too, will ease. “With inflation remaining low, top-line growth is likely to align more closely with nominal GDP growth. A significant portion of the transition from the unorganised to the organised sector has already occurred, paving the way for a steady 11-12% growth in both top- and bottom-line,” says Surana.

While the narrative is increasingly turning sober on the Street following the massive selloff by foreign portfolio investors, one can take heart from the fact that, just as in the past, the stalwarts of India Inc. will put up a spirited performance in the times to come.