Retail, telecom help RIL beat Indian Oil to be number one player by revenue

Fortune India list shows RIL as India's top firm in FY19

Reliance Industries (RIL) has emerged as the number one company in terms of revenue in the Fortune India 500 list for 2019, pipping Indian Oil Corporation (IOC). RIL revenues crossed Rs 5.81 trillion in FY19 against IOC’s Rs 5.36 trillion. 

Since it was first published in 2010, IOC has been topping the list. 

RIL’s race to the top was powered by consumer-facing businesses like organised retail and telecom.

In terms of profits too, Mukesh Ambani-led RIL’s FY19 net profit was ahead at Rs 39,588 crore against IOC’s Rs 17,377 crore. 

Over the past 10 years, RIL’s profit has been an average 3.01 times higher than that of IOC. The highest this went was up to 4.8 times in FY15.

Another interesting aspect of the 2019 list is the divergence in the fortunes of the public and private sector banks as 14 of the 22 public sector banks reported cumulative losses of Rs 74,253 crore, while the cumulative profit of 24 of the total private sector banks (including foreign banks and cooperative banks) touched Rs 60,747 crore — 6.16 per cent higher than FY18.

Just two private sector banks posted losses with IDFC First Bank reporting a loss of Rs 1,908 crore and Lakshmi Vilas Bank at Rs 894 crore.

The public sector banks made huge losses after several companies in the roads, power and steel sector failed to repay their loans. Many of these companies are now facing bankruptcy proceedings in courts across the country.

The top 500 list also showed that the combined revenue and profit of the companies in 2019 grew by 9.53 per cent and 11.8 per cent, respectively, even as 57 companies dropped off for reasons, including consolidation within the public sector banks and public sector undertakings space. The top 500 companies reported profit of Rs 4.55 trillion and revenues of Rs 91.7 trillion in the FY19 (see chart).

A total of 65 companies posted a cumulative loss of Rs 1.67 trillion, as compared to last year’s Rs 2 trillion racked up by 79 firms. 

The list does not take into account subsidiaries of companies, hence many of the takeovers resulted in the acquired companies being excluded such as Hindustan Petroleum Corporation, which was acquired by Oil and Natural Gas Corporation, Rural Electrification Corporation acquired by Power Finance Corporation, Vijaya Bank and Dena Bank (merged into Bank of Baroda). 

Consolidation was also seen in the private sector where Bhushan Steel was acquired by Tata Steel and Capital First, a non-bank finance company, merged with IDFC Bank to create IDFC First Bank.

The oil and gas sector, with eight companies accounted for 22.3 per cent of the total revenue of the 500 companies, followed by banking with 15.88 per cent of the total. The banking sector, with 48 companies, is the biggest contributor by way of number of companies in the list. 

Oil and gas also has the highest share of profit in Fortune 500, at 23.44 per cent.

With 20 companies, the infotech sector accounts for 4.98 per cent of the total revenue of the 500 companies, but has the second-highest share of total profit of all the companies on the list, at 16.17 per cent.  

The total employee cost of the 500 companies grew by 7.26 per cent this year, compared to 10.22 per cent in the previous year.

The top 500 list is based on data provided by Capitaline Plus. Fortune India Research slices and analyses the data to come up with the annual rankings of the 500 companies.