NO DOUBT FY21 will be remembered as annus horribilis with the rogue virus not just destroying human lives, but also affecting the Indian economy with real gross domestic product (GDP) growth falling by a record 7.3% in FY21 (around ₹10 lakh crore) — the first-ever massive decline since 1980 — to ₹135 lakh crore. But, every crisis has a silver lining. The year eventually turned out to be annus mirabilis for India Inc. in more ways than one. The initial fears that corporates will sink deep into the red, thankfully, did not play out.
The steep cut in corporate tax in September 2019 — from an effective 35% to 26% — coupled with cost-cutting during the pandemic helped corporates improve bottom lines. As firms deferred capital expenditure, internal cash flows were used to cut down on debt. Companies in the top 15 sectors reduced debt by more than ₹1.7 lakh crore in FY21, according to a State Bank of India study. That is reflected in this year’s Fortune 500 list, with the average debt-equity ratio of companies working out to 1.74x.
This is the first time since 2010 — when Fortune India began chronicling Indian corporates in the marquee listing — that year-on-year (Y-o-Y) revenue growth slid 2.4% in FY21. But, profit turned out to be the best-ever — growing at a record 75% Y-o-Y to ₹6.22 lakh crore, a resounding turnaround from last year when the Fortune 500 universe saw its cumulative profit decline 22% Y-o-Y to ₹3.6 lakh crore. Though the base effect did come into play, the performance was also aided by a concoction of higher prices, lower interest rates, and better cost management. Banking, oil & gas and IT services accounted for over 53% of the Fortune 500 profit pool for the year.
While the Fortune India 500 list is all about size, what stands out this year is that 418 companies from the 2020 list made it to this year’s ranking despite the pandemic and were prime contributors — accounting for 93.92% of the cumulative total income and 94.30% of the cumulative profit. Of 82 companies that couldn’t make it to this year’s list, the total income of 56 companies was below the cut-off of the last name on the list. Of the remaining, audited FY21 numbers were not available for 23 firms as on the cut-off date of October 31, 2021, and three subsidiaries were not taken into account since the parent or holding company’s consolidated figures were considered.
Notably, there are 58 debutants in the list with a cumulative revenue of ₹2.88 lakh crore and profit of ₹12,603 crore. Among the newbies, the highest revenue (₹21,204 crore) came in from MMTC-PAMP, the joint venture between state-owned MMTC and Swiss refiner PAMP, while fabric care player, Jyothy Labs, was the smallest with a turnover of ₹1,954 crore. There were also 24 names that re-entered the list with cumulative revenue of ₹2.48 lakh crore and profit of over ₹28,000 crore.
If change is the only constant, the listing had that in plenty with just 15 companies retaining their previous year’s spots. Two companies — Suzlon and Motilal Oswal Financial Services — jumped over 100 notches higher to ranks 307 and 332, respectively. For Suzlon, 2021 was the first year of restarting operations post debt-restructuring, while Motilal Oswal made the most of the investing frenzy seen on the Street during the fiscal — clocking ₹3,631 crore in revenue. However, 15 companies fell over 100 notches, with Future Retail tumbling the most — 182 ranks — even as other retail players in the apparel and jewellery business took a knock amid the lockdown.
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