RIL emerges as largest wealth creator for 5th time in a row: Motilal study

For the fifth time in succession, Reliance Industries has emerged as the largest wealth creator over five years from 2018-23. This takes Reliance’s overall No.1 tally to 10 in the last 17 five-year study periods, said a report by brokerage Motilal Oswal.

During 2018-23, the top 100 wealth creators of India Inc collectively created a wealth of Rs 70.5 trillion. The pace of wealth creation stood at 21 per cent CAGR, well higher than the BSE Sensex return of 12 per cent. 

A relatively low-profile company, Lloyds Metals, has emerged as the fastest wealth Creator with a 2018-23 Price CAGR of 79 per cent. Rs 1 million invested in 2018 in the top 10 fastest wealth creators would be worth Rs 10 million in 2023, a

return CAGR of 59% vi/s 12% for the BSE Sensex, said the study. 

Capri Global emerged as the most consistent wealth creator. Motilal Oswal defines consistent Wealth Creators based on the number of years the stock has out-performed in each of the last five years. Where the number of years is the same, the stock price CAGR decides the rank. It has outperformed the BSE Sensex in all the last 5 years and has the highest price CAGR of 50 per cent. Capri Global has outperformed the BSE Sensex in all the last five years and has the highest price CAGR of 50 per cent. 

Adani Enterprises has emerged as the all-around wealth creators for the second time in a row. All-round wealth creators are based on the summation of ranks, under each of the 3 categories – Biggest, Fastest and Consistent. Where the scores are tied, the stock price CAGR decides the All-round rank. Based on the above criteria, Adani Enterprises has emerged as the Best All-round Wealth Creator.

The technology sector has emerged as the largest wealth-creating sector for the second year in a row, ahead of Consumer & Retail and Financials.

PSUs on the comeback trail?

The public sector undertakings (PSUs) Wealth Creation performance during 2018-23 has seen a significant improvement . Two key factors have driven PSU Wealth Creation – turnaround by two banks (SBI and Bank of Maharashtra) and growth in the defense sector (Bharat Dynamics, Bharat Electronics and Hindustan Aeronautics). 

Financials have been the top Wealth Destroyer despite being the third largest Wealth Creator. The total wealth destroyed during 2018-23 is Rs 17 trillion, 25 per cent of the total wealth created by top 100 companies. This remains well below the Covid-hit study period 2015-20. Six of the top 10 wealth-destroying companies are from the Financials sector (including Insurance). Interestingly, financials is the top Wealth Destroying sector, and the third largest Wealth Creating sector at the same time.