::..:: ARCHIVES ::..::

BY POOJA KOTHARI

Of the 30 companies that make up the BSE Sensex, one of the oldest stock exchange indices in the country, about half have been added in this decade. A business pundit in the late nineties would have found it difficult to predict that Bharti Airtel will become the largest telecom services provider in the country, or that Sun Pharma or Sterlite will grow into leaders in their respective sectors – and that they will all become constituents of the index.

But then, there was no Inc. India at that time, nor a Best Performing 500 list that could have helped chronicle the growth stories of the future.

There is perhaps no better way to sum up the philosophy and the spirit of the Best Performing 500 than to borrow the tagline of one of our honoree companies, ABG Shipyard: ‘Where the Future Belongs’. The list is a testimony to the India Inc. of tomorrow.

You may be forgiven for asking ABG who? While the name may not readily ring a bell, this Mumbai-based company, with a sales turnover of Rs 966.84 crore in 2007-08, ranks 28th in our survey and is the largest private sector shipyard in the country.

It is a similar story with the rest of the honorees on our list. While these companies are nowhere compared to the heavyweights of corporate India – Tata, Reliance, Birla, Mahindra, etc – don’t be surprised if many of them get there a few years down the line.

They are thinking bigger than their size would suggest and have much higher aspirations than their resources currently allow. From netting “$1 billion in topline” to “growing at 25%” and “being counted among the top five players in their sectors”, these “mid-size” companies are waiting to unleash their potential to become the “big” of tomorrow. They represent the hopes of a new generation of entrepreneurs.

Yes, times are tough. The economy isn’t growing at the speed it used to. The stock market’s volatile and raising money is difficult. We live in a different world today than the one we woke up to on the first day of the year. But the tide’s already turning, if you go by the headlines and ads in newspapers. The experts are hinting that the bottom may be near, if not already past. What better time than now, when hope is in the air, to put ink to 500 such dreams.

As any businessperson will tell you, tough times don’t last, but they remain long enough to separate the men from the boys. Look at Sanjeev Bikhchandani, the CEO of Info Edge, ranked 120 in our list, who not only survived the 2001 dotcom bust, but has redefined the way India recruits.

Our first-ever list of mid-sized companies honours this “never-say-die” spirit that keeps the adrenalin flowing in entrepreneurs. It is this spirit that has allowed them to grow at an average rate of 34% in the last three years.

You only have to attend the annual Growth Summit organized by 9.9 Media to come across many more such stories of marvelous entrepreneurship. From smaller towns of India, to the streets of Karol Bagh in Delhi, they’ve overcome the lack of access to resources normally available to bigger companies to build businesses that are growing fast, and more importantly, dreaming big. While many want to grow “inorganically” over the next three years, they are clear about achieving scale. This survey is a salute to those journeys to success.

The survey throws up a heterogeneous mix of companies, across regions, sectors, and product categories. While the top performer is Sun TV, a south Indian entertainment giant that has grown at 64% for the last three years, the honorees are spread geographically all over India, from Edappally in Kerala to Chandigarh in north India.

Similarly, the winners cover sectors ranging from realty, cosmetics, IT products and services, chemicals, pharma, mining, entertainment, cement, ship-building, paper, and industrial electronics, among others. Capital goods accounts for the highest number of companies in the Top 500 list.

Not surprisingly, real estate has grown the fastest at 69% for the past three years. Other fast-growing sectors include unglamorous businesses such as steel, mining and engineering, having grown within the range of 32% to 69%.

The honorees averaged net sales of Rs 467 crore in 2008. While average profit in the same time period was Rs 61 crore for the Top 500, the maximum profit was Rs 961 crore, recorded by Financial Technologies.

The survey also throws up some surprises, such as the margins in the power generation and distribution sector. To imagine that the average profit margins in this sector, at 66%, are more than double that in the more glamorous technology sector (29%), the second entry on the list of most profitable sectors.

Pharmaceutical and IT & ITeS companies stand out for being very innovative and global in their operations. The two sectors count for up to half the entries on the Top 10 lists for smart innovators and globalisers in our survey.

The mid-size players have created wealth along the way. In fact, they’ve outshone some of the more prominent and large Indian companies in terms of growth in market cap. We’d even say this list actually presents a new order of wealth creators. Educomp Solutions, an education products company, tops the list of Top 10 consistent wealth creators.

But do we admire these companies only because they created wealth, in part, because of skyrocketing capital markets? Not really. There is more to it. A company in India – that too, mid-sized – when it commits itself to the markets, opens itself to scrutiny, certain norms of governance and control and the diktat of external circumstances. All of these are signs of a company that feels ready to take on the world!

And ready they are, to discover their true potential. After decades of stifling, the spirit of entrepreneurship is finally finding its voice in these growth stories. Spectacular tales of inspiration, self-motivation and sheer performance have become common introductory notes to the set of companies honored by Inc. India.

Join us in raising a toast to the future of India Inc.