Crunch Time

Corporate India strengthened its resolve and tightened its belt, but slowdown hit market capitalisation of BT 500 companies for the first time in seven years.

- Anup Jayaram

IT’S BEEN A TOUGH YEAR, not just for the economy, but for India Inc. too. As the economy wades through a longish slowdown, India Inc. appears to have strengthened its resolve and tightened its belt. Total income of BT 500 companies rose 16.4 per cent in 2018/19 as against an 11 per cent in 2017/18. Profit after tax recorded a remarkable 19.4 per cent increase as opposed to the 12.2 per cent decline last year.

However, the overall market cap of BT 500 companies fell for the first time in seven years, down 1.5 per cent (October 2018-September 2019 period) as against a 23.4 per cent increase in the same period the previous year and 20.5 per cent in 2016/17; though the decline is not as bad as the last recorded drop of 6.5 per cent in 2011/12. Among the leading indicators tracked in the BT 500 listing, a 10.04 per cent growth in total assets during the year is lower than the 12 per cent recorded in 2017/18, indicating a slowdown in asset creation.

The fall in overall market cap has, however, not affected the leaders. The top three companies – Reliance Industries (RIL), Tata Consultancy Services (TCS) and HDFC Bank – have retained their rankings this year too. Both RIL and TCS have recorded a 24.2 per cent increase in average market cap. Among the top six, only ITC has moved down two notches from rank 4 that it had retained for the last two years. Both HDFC Bank and HDFC make it among India’s leading five companies, again after 2016/17.