THE NEXT 500

The cumulative profit of the Next 500 companies fell 36% this year, a much better show when compared to last year’s fall of 65%. The churn continues, with the list seeing 119 new entrants as compared to last year ’s 163.

- RAJIV BHUVA

LAST YEAR’S FORTUNE INDIA NEXT 500 list saw the cumulative profit of the companies decline over 65%, the highest since 2015, when the first list came out. This year, it fell 36%. Not so bad as last year, but not so good either. The Next 500 list is compiled using data of the preceding financial year.

What caused this decline? This year 427 companies posted a cumulative profit of ₹41,146.5 crore, but the remaining 73 companies with a cumulative loss of ₹37,535.57 crore erased much of that, leaving just ₹3,610.93 crore as the net profit of the Next 500. Some of the latter happened to double their losses from the year-ago period: Aban Offshore, No. 332 (down from No. 110 in 2019), reported a net loss of ₹5,273.45 crore in FY19 which was twice its FY18 loss of ₹2,606.48 crore; Essar Shipping, at No. 177 (down from No. 72 last year) reported a net loss of ₹3,775.3 crore, over 2.25 times its FY18 loss of ₹1,664.83 crore.

It didn’t help that new entrants Kwality (No. 45) and IL&FS Engineering & Construction (No. 207) posted losses of ₹3,216.15 crore and ₹2,036.45 crore, respectively. Kwality and IL&FS Engineering & Construction failed to make it to last year’s Fortune India 500 list owing to a decline of 73.11% and 41.34%, respectively, in their FY19 revenues. Besides them, 16 other companies with declining revenues slipped to the Next 500 list after failing to make the cut for the 2019 Fortune India 500 list.