Boosted by its consumer-facing businesses like organised retail and telecom, Reliance Industries (RIL) ended Indian Oil Corporation’s (IOC) 10-year reign as India’s largest corporation on the Fortune India 500 list. The Mukesh Ambani-led conglomerate also became the first privately-held and the only company apart from the state run oil-refiner to top the list since it was first published in 2010.
RIL posted a 41.5% rise in its revenue in fiscal year 2019, which was 8.4% more than IOC, the second largest company on the list. RIL’s FY19 revenue stood at ₹5.81 lakh crore, while IOC posted a growth of 26.6% in sales to ₹5.36 lakh crore in in the same year. RIL’s profit for FY19 was also more than double that of IOC, at ₹39,588 crore.
Over the past 10 years, the oil-to-retail conglomerate’s profit has been an average three times higher than that of IOC. The highest it touched compared to IOC was up to 4.8 times, in FY15, when RIL’s profit was ₹23,566 crore and the public sector major’s stood at ₹4,912 crore.
In the last fiscal, organised retail contributed 17% of RIL’s top line, while digital services pitched in with 6.04%. Comparatively, in FY14, refining contributed 19.2% of RIL’s revenue, while petrochemicals made a chunk of the sales with 74.9%. In FY19, revenue contribution from refining fell to 51.1% and petrochemicals to 22.3%.
Highs and Lows
Overall, the revenue of the Fortune India 500 companies in the 2019 list grew by 9.53%, while profit grew 11.8%. A total of 57 companies dropped off the list for reasons including consolidation within the public sector banks, public sector undertakings, as well as the private sector. It is to be noted that the list does not take into account subsidiaries of companies, hence many of the takeovers resulted in the acquired companies being excluded. Some of these names include Hindustan Petroleum Corporation Limited which was acquired by ONGC; REC (formerly Rural Electrification Corporation Limited) was acquired by the Power Finance Corporation; and, Vijaya Bank and Dena Bank merged into Bank of Baroda. In the private sector, troubled steelmaker Bhushan Steel was bought by Tata Steel, while Capital First merged with IDFC Bank to create IDFC First Bank.
This year, the total loss posted by the 500 companies also came down, with 65 companies posting a cumulative loss of ₹1.67 lakh crore, compared to last year’s ₹2 lakh crore racked up by 79 companies.
An interesting aspect of the 2019 list is the divergence in fortunes of the public and private sector banks. As many as 14 of 22 public sector banks reported cumulative losses of ₹74,253 crore. In contrast, just two private sector banks posted losses (IDFC First Bank, at ₹1907.9 crore; and Lakshmi Vilas Bank, at ₹894.1 crore). The total profit of 24 of the total private sector banks (including foreign banks and cooperative banks) was ₹60,747 crore, a 6.16% increase over FY18.
The oil and gas sector (with eight companies) accounted for 22.3% of the total revenue of the 500 companies, followed by banking with 15.88% of the total. The banking sector, with 48 companies, is also the biggest contributor by way of the number of companies in the list.Oil and gas, however, has the highest share of profit in the 500, at 23.44%.
With 20 companies, the infotech sector accounts for 4.98% of the total revenue of the 500, but has the second highest share of total profit of all the companies on the list, at 16.17%.
The total employee cost of the 500 companies grew by 7.26% this year, compared to 10.22% in the previous year.
Manufacturer HEG Ltd saw the highest jump of 181 places in the list, moving up to No. 206 in 2019. Graphite India followed HEG with a jump of 171 places at No. 172. Wire rope maker Usha Martin saw the highest fall of 161 places, ending up at No. 441.
The Fortune India 500 is based on data provided by CapitalinePlus. Fortune India Research slices and analyses the data to come up with the annual rankings of the 500.