India’s TOP 500 Companies 2020

INDIA’S TOP 500 COMPANIES 2020 110 Economic Headwinds Halt the Momentum of Top 500 Companies in FY20 In order to assess whether the Universe of Top 500 Companies were able to sustain the momentum of FY19 into FY20, Dun & Bradstreet identified 490 companies which had consistently published their audited annual interim financials for FY18, FY19 and FY20. Parameters y-o-y comparison (% change over previous year) FY19 FY20 Total Income 16.7 0.3 Total Expenses 17.4 1.0 PAT 17.0 (13.4) Source: Dun & Bradstreet Research Based on our analysis, these 490 companies posted a 16.7% gain in their aggregate total income in FY19. Their performance, however, stumbled in FY20. The economy was already going through a slowdown, throughout a major part of FY20, which was exacerbated by the imposition of a nationwide lockdown in the wake of the COVID-19 pandemic, which brought economic activity to a grinding halt. The aggregate total income, which had increased by nearly 17% in FY19, remained flat during FY20. This was largely due to sharp declines in the total incomes of the Oil – Refining & Marketing, Iron & Steel and Automobiles sectors. Furthermore, net profit dropped 13.4% in FY20 as against a 17% rise a year ago. This was even before the full impact of COVID-19 began to reflect on the overall demand, which points to an economy that was already struggling. India Inc’s Response to COVID-19 The novel coronavirus (COVID-19) is being considered as a major disruptor the world has witnessed in recent times. The virus, which reportedly originated in Wuhan, China in December 2019, quickly spread to other parts of the globe, prompting the World Health Organization (WHO) to declare it as a global pandemic. So far, the outbreak has claimed the lives of 729,000 people and infected over nearly 20 mn people worldwide. Beyond health, the dramatic spread of COVID-19 has completely transformed all other aspects of human life, compelling us to change the way we work, play and even interact with each other. Several countries scrambled to contain the pandemic, imposing strict lockdowns to contain the infection and bringing almost all economic activity to a grinding halt. Economy Matters As per latest IMF estimates (June 2020), the global economy is expected to contract by 4.9% in 2020, marking the steepest slowdown since the Great Depression of the 1930s. While advanced economies have been hit harder, emerging and developing economies seem to be better placed in comparison. Emerging markets and developing economies are expected to shrink by 3%, with India’s growth estimated to decline by 4.5%. China, which lifted its lockdown in April 2020 and started gradually opening up its economy, is expected to grow 1% in 2020. The sectors that were hit the hardest include oil & natural gas, aviation, travel & tourism, industrial metals and food & beverages. Governments across the world have come forward with stimulus packages and other financial incentives to support businesses. As noted by the World Economic Forum, ‘supporting SMEs and larger businesses is crucial for Dun & Bradstreet