DSIJ Mindshare

Top Ten Profit Making Companies In India

ICICI Bank


ICICI Bank is the largest banks in India in terms of net profit. It is also one of the private sector banks known for its aggressive business strategy. The bank is under the leadership of its MD and CEO Chanda Kochhar and has strong and good management credentials. ICICI Bank is fancied by the traders as it has good volatile movement (with beta of 1.82), helping the traders to make money over a short term. In the March quarter result of 2012, most of its parameters have shown improvement. The net interest margin (NIM) increased by 27 basis points to 3.01 per cent while its net NPA decreased by 38 basis points to 0.73 per cent on a YoY basis. It is one of the leading banks which took the move of reducing the interest rate following the RBI’s action. The bank is currently available at a price to earnings multiple of 15.72 times and price to book value of 1.68 times of FY12.

State Bank of India



State Bank of India (SBI) is one of the largest Indian banks. On the trailing four quarters it reported profit of Rs 7,677 crore. The bank has been able to post good bottomline growth primarily because of improvement seen in its net interest margin (NIM). For the December quarter of 2012, the bank’s NIM increased by 44 basis points to 4.05 per cent, which is one of the best in the industry. For the trailing four quarters the bank is facing headwinds in posting good bottomline mainly because of higher provisioning. It is facing asset quality pressure which is evident from the fact that for the December quarter of 2011 the net NPA of the bank increased by 61 basis points to 2.22 per cent on a YoY basis while on a sequential basis it increased by 18 basis points. SBI is currently trading at a book value of around 2x which should be considered as fairly valued.

Reliance Industries



Reliance Industries (RIL), through its groups, contributes around 3 per cent of India’s gross domestic product (GDP). No wonder the scrip is featured at the top amongst the largest companies in India. It now has another feather in its hat. It is also the second-largest company on the net profit front. For FY12 it has posted net profit of Rs 20,040 crore which stands next only to ONGC. Reliance Industries is credited for bringing retail investors to the stock market. It has not only done that but has also created immense wealth for the investors. The company operates mainly in three business segments viz. petrochemicals, refining and oil & gas. Reliance Industries enjoys global leadership in its businesses, being the largest polyester yarn and fibre producer in the world and among the top five to ten producers in the world in major petrochemical products. Apart from this, Reliance Industries has also diversified into other segments which include textile, retail business and special economic zone (SEZ) development.

NMDC



NMDC, incorporated in 1958, is the largest iron ore producing and exporting company in India, presently producing about 30 million tonnes of iron ore from three fully mechanised mines at Bailadila Deposit-14/11C, Bailadila Deposit-5, 10/11A (Chhattisgarh) and Donimalai Iron Ore Mines (Karnataka). The company generates 98 per cent of the revenue from the sale of iron ore to the domestic markets (86 per cent) and the rest comes from exports. In the trailing last four quarters the net sales of the company stood at Rs 12,436 crore while its net profit stood at Rs 7,721 crore. The company operates in a high margin business segment and has consistently paid dividend to the shareholders. It now plans to expand and establish its presence as an integrated producer of iron and steel through selective value-addition projects. The company has signed an MOU with the state government of Chhattisgarh to develop a steel plant with a capacity of 3 MTPA at Jagdalpur, and also has plans to develop a steel plant in Karnataka.

Tata Steel



Tata Steel is among the top ten steel producing companies in the world with an annual crude steel production capacity of over 28 million tonnes per annum. The company has a steel producing capacity in India, the UK, Netherlands, Thailand, Singapore, China and Australia. In India the steel producing capacity stood at 6.8 million tonnes in FY12 and it is the third-largest steel producing company after Steel Authority of India (14 MTPA) and JSW Steel (10.5 MTPA). In the trailing last four quarters the net sales of the company (India) stood at Rs 32,794 crore while net profit stood at Rs 6,843 crore. Tata Steel remains the foremost steel company in India in terms of productivity and efficiency. The company has captive iron ore mines which protect the company from any shortages of raw material and price volatility. It is now in the process of increasing its crude steel making capacity through expansion projects at Jamshedpur (brownfield expansion from 6.8 MTPA to 9.7 MTPA) and Kalinganagar (greenfield expansion of 6 MTPA capacity). Both the plants will drive the growth of the company in the coming year.

TCS




TCS, the largest software exporter in India, has built a global reputation for its ability to help customers achieve their business objectives by providing innovative, best-in-class consulting, IT and IT-enabled solutions and services. The company’s full services portfolio consists of application development and maintenance, business intelligence, enterprise solutions, assurance, engineering and industrial services, IT infrastructure services, business process outsourcing, consulting and asset leveraged solutions. The company generates revenues by providing IT solutions to various sectors such as banking, financial services and insurance (BFSI), telecom, manufacturing, retail and consumer packaged goods. The company generates 65-70 per cent of its revenue from the major markets of North America and Europe, including the UK. In the trailing last four quarters the net sales of the company stood at Rs 48,614 crore while the net profit stood at Rs 10,523 crore. 

Infosys


Infosys remains the second-largest software exporting company after TCS. Infosys has always been known for its efforts to make India a major IT hub in the world. The core strength of the company is in providing end-to-end IT service solutions to its customers. Up to 97.8 per cent of the company’s revenues come from its existing customers (FY12). The company has a large base of various IT products and services which includes major products such as Finacle and Flypp as well as services such as management consulting services, business application services, etc. It has a global footprint with sales offices in 29 countries and development centers in India, the US, China, Australia, the UK, Canada, Japan and many other countries. Infosys has over 1,49,994 employees of 89 nationalities. In the trailing last four quarters the net sales of the company stood at Rs 31,254 crore while its net profit stood at Rs 8,470 crore. The company generates 70 per cent of the revenues from the US and Europe.

Coal India



Coal India is the largest coal producing company in the world. The company, through its various subsidiaries, meets more than 80 per cent of the coal demand in the country. It is one of the Maharatna PSUs. The company sells most of its coal at discount to the international prices. Despite this its financial performance has been very robust in the last two years. The key to its profitability is e-auction coal which is sold at the market price. Currently it sells about 7 per cent of its total coal at the market price. This has caused improvement in its financial performance with profitability ratios showing a multifold rise in the last two years. The company in the trailing four quarters has made a profit of Rs 14,995 crore on total sales of Rs 58,012 crore. Going ahead the company expects to keep its e-auction coal at the current level. Its production target for the current fiscal is set at 468 million tonnes.

NTPC


State-owned National Thermal Power Corporation (NTPC) is the largest power generating company in the country. It has a total power generation capacity of 37,514 MW. The company has diversified operations in power generation, coal mining, power equipment manufacturing, power trading, etc which makes it an integrated company in the power sector with presence in the entire value chain of power generation. Currently up to 84 per cent of its capacity is coal-based while 16 per cent of the capacity is gas-based. The company is also developing about 1,000 MW of renewable energy capacity which will be commissioned by 2017. It has ambitious plans to become a 75,000 MW company by 2017 and a 1,28,000 MW company by the year 2032. NTPC represents 19 per cent of the country’s total generation capacity which is pegged at 1,99,627 MW. In the traling four quarters it had total income of Rs 61,586 crore while its net profit in the same period remained at Rs 9,412 crore.

ONGC



Oil & Natural Gas Corporation (ONGC) is the largest company in India in terms of net profit. It is also one of five companies which have Maharatna status. According to Platts’ Top 250 Global Energy Ranking, ONGC is the foremost exploration and production company in the world. ONGC was also ranked the 172nd largest company by Forbes Global 2000 for the year 2010. The company represents nearly 3/4th of the total crude production and 81 per cent of gas production in India. It has discovered six of the seven producing basins in India and added 6.4 billion tonnes of oil & gas reserves. Besides, ONGC also has overseas energy assets in India. For the trailing four quarters the company posted total sales of Rs 73,952 crore with net profit of Rs 22,269 crore. Recently ONGC has sought permission to start new exploration activity in the state of Rajastan.

Company Name

Share Price

Face Value

Market Cap (Rs Cr)

Trailing Sales (Rs Cr)

Trailing PAT (Rs Cr)

Trailing Year End

ONGC

264.75

5

2,26,506.60

73,952.34

22,269.40

31-12-2011

Reliance Industries

738.85

10

2,81,612.81

3,29,904.00

20,040.00

31-03-2012

Tata Consultancy Services

1,280.35

1

2,50,592.79

38,858.54

10,975.98

31-03-2012

NTPC

156.95

10

1,29,412.56

61,586.95

9,412.13

31-12-2011

Infosys

2,484.35

5

1,42,658.83

31,254.00

8,470.00

31-03-2012

Coal India

337.50

10

2,13,177.30

423.28

8,227.37

31-12-2011

NMDC

174.10

1

69,025.71

12,436.63

7,721.73

31-12-2011

State Bank of India

2,085.20

10

1,39,926.27

99,547.30

7,677.90

31-12-2011

Tata Steel

448.30

10

43,539.54

32,794.80

6,843.62

31-12-2011

ICICI Bank

857.55

10

98,864.05

33,542.65

6,465.25

31-03-2012

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