New Delhi: If revenues be considered as a company’s actual size and market capitalization as a measure of investors’ faith, Reliance Industries has emerged as the most loved company on Indian bourses with its market value exceeding the full-year turnover by highest margin among all.
Ironically, state-run refiner Indian Oil Corp, the country’s biggest Fortune 500 firm by virtue of having the largest turnover, comes at the bottom of this list, according to an analysis of difference between market capitalisation and annual revenue.
Mukesh Ambani-led RIL, India’s most valued firm, has a market cap exceeding its latest fiscal total income by more than Rs2,00,000 crore. This is the highest among 2,744 actively traded listed companies who have announced their latest fiscal financial results. The company’s market cap currently stands at about Rs3,17,000 crore and is the only company to have a market cap of more than Rs3 trillion.
RIL is followed by Sunil Mittal-led Bharti Airtel, the country’s biggest private sector cellular operator, in terms of gap between market cap and annual revenue, which currently stands at about Rs1,56,000 crore.
Public sector energy giant ONGC, the second most valued firm after RIL, is ranked third with a gap of about Rs1,35,000 crore, followed by largest real estate firm DLF Ltd, commanding a market cap premium of about Rs1,25,000 crore over its revenue. State-run power giant NTPC is fifth with a difference of about Rs1,20,000 crore.
Other companies in the top ten list include, Anil Ambani group firm Reliance Communications, IT giants Infosys and TCS, biggest private sector lender ICICI Bank and public sector power equipment maker BHEL.
A total of six companies have market cap exceeding their annual revenues by more than Rs1,00,000 crore, while another ten enjoy a gap of more than Rs50,000 crore.
Out of the total 2,744 companies under review, a majority of 54% companies (1,490 firms) currently have a market cap more than their total income in the last fiscal.
Among those with revenue exceeding their market cap, IOC comes on top with a difference of more than Rs1,70,000 crore.
IOC is followed by state-run refiners BPCL and HPCL, both of which also figure as Indian entries on the global Fortune 500 list, which ranks the companies on the basis of their annual turnover.
All top five companies on this scale come from the oil and gas space and also include Chennai Petroleum and Mangalore Refinery and Petrochemicals Ltd.
However, only IOC’s income exceeds its market cap by more than Rs1,00,000 crore, while the gap for BPCL and HPCL is between Rs80,000 crore and Rs90,000 crore.
Other major firms with significantly higher total income than market cap include State Trading Corp (6th), HCL Infosystems (7th), Ruchi Soya Industries (8th), Ispat Industries (9th) and Bongaigaon Refinery (10th).
Companies with marginal gap between market cap and revenue (of less than Rs1 crore) include Aditya Forge, Odyssey Corp, R Systems International, Jindal Hotels and B N Rathi Securities. There are a total of 67 such companies, just about 2% of total, while not a single company has exactly equal revenue and market cap.