Despite Covid-19 pandemic, India Inc scripted a smart turnaround

Just a few months ago, the mood in the corridors of corporate India was all gloom and doom. Battered by a pandemic that spared none due to the prolonged lockdown, even the best in the business had little visibility about the future. A large number of companies stared at defaults, selling or shutting of businesses and widespread ratings downgrades. The hint of slowdown came even before Covid-19 struck, but no one knew the extent of the problem till the numbers came. The combined net profit of BS 1000 companies was down a record 45.8 per cent during the fiscal year ending March 2020. Revenues were down 2.3 per cent, the worst in at least two decades.

Close to a year later, India Inc has seen one of the smartest turnarounds in its history. Profit growth in the last two quarters has been one of the highest ever and recovery in earnings has been broad-based, rekindling hopes of a new cycle of growth for India Inc. This certainly does not mean it’s roses all the way. As the analysis of corporate performance in the following pages suggests, the huge uptick in corporate profitability in FY21 so far has largely come from higher operating margins and cost savings rather than higher revenues and sales volume. It remains to be seen whether higher profits would be sufficient to maintain the growth momentum once the favourable base effect wears out in the second half of FY22.

The year 2021 could also prove whether India’s unicorns (startup technology companies valued at a billion dollars or more) are just a gleam in some venture capitalist’s eye or will they get respectable numbers on market capitalisation. There is no doubt about the incredible efforts of some of these startups in bringing out real innovations that have touched people’s lives, but have they built real businesses and laid building blocks for tomorrow? Our cover story looks at the contribution of some of these extraordinarily successful men and women to find answers to these questions.   

BS 1000 is also about celebrating success. An eminent jury of seven top decision-makers, led by Aditya Birla Group Chairman Kumar Mangalam Birla, selected the winners of the Business Standard Awards for corporate excellence in 2020. Read about the outstanding success stories.