These are not particularly exciting times for India Inc. Except for the multi-year low crude price, there is nothing much to cheer about, though in itself, it is a reason for cheer. Although there is talk of a recovery, earnings growth continues to disappoint. Consider the financial performance that India Inc managed to put up in FY15.
The 30 large-caps that make up the Sensex reported 9% growth in net sales on an average, while their profit after tax contracted 0.8%. For the first half of FY16, their sales and profit grew by 6.4% and 3.3% respectively. Investors are not optimistic about a recovery in FY17 either given the muted growth estimates. Not surprising that the Sensex ended 2015 in the red with foreign institutional investors pulling out over 27,000 crore in the last four months.
Amid this gloom, when we ran the filter for companies that have clocked 25% growth in sales and profit year-on-year for the past five years, it felt like an exercise in nostalgia. Gregg Easterbrook’s wisecrack, “Torture numbers and they’ll confess to anything,” also came to mind. 31 companies from across sectors made the shortlist. If there was enough time on our hands, we could have got Baskin-Robbins to sponsor the issue but our annual edition of Fastest Growing Companies was due.
One sector that has always dominated the list ever since we started this exercise in 2012 is the consumer space. Slowdown or no slowdown, several companies in this space have been able to keep up their pace of growth; this year with about seven consumer companies making it to the list. No prizes for guessing which sector dropped off.
Excessive leverage, lack of traction in the economy and other bottlenecks have stunted the growth of companies in the infrastructure space. The situation seems unlikely to change for them soon and the business environment is challenging for the rest. When we run the filter next year, we certainly hope that the gloom would have passed us by. To know more about these companies that topped the chart, read Tec(h)tonic Shift.