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CHAPTER IV
EXTENT OF CORPORATE GROWTH
As revealed by review of literature (see table 2.1 and 2.2) in chapter II, sustained growth
in companies is very rare (also see, Zook et al., 2000; Zook and Rogers, 2001; Feindt et
al., 2002). Firm’s growth is not necessarily a stable phenomenon; occurring in one period
of time but not necessarily the next (Spilling, 2001). Also, growth profiles of companies
are continually changing. Some companies are likely to survive more than others. Factors
that lead to the relative longevity of some companies can cause others to decline. Hence
understanding the reasons for the survival and longevity of these companies is of central
importance for managing organizations (Barna, 1962; Singh and Whittington, 1968,
1975; Brusco et al., 1979; Evans, 1987; Dunne and Hughes, 1994). Thus, an attempt has
been made in this chapter to analyse the extent of growth of the selected Indian
companies during 1993-94 to 20007-08.
The extent of corporate growth focuses on studying movement of companies between the
different growth categories over the selected period of time. Thus a growth extent will
indicate whether companies have moved towards higher growth categories, or shifted
back to low growth categories, or did not move over entire study period. This analysis
has been carried out for individual companies and also for industries to which these
companies belong.
4.1 MEASURING THE EXTENT OF CORPORATE GROWTH
Based on the theoretical considerations1 and empirical research
2, compounded annual
growth rate of net sales (CAGRNS) and compounded annual growth rate of market
capitalisation (CAGRMC) have been used as growth measures for measuring extent of
corporate growth. Chapter III on database and research methodology shows the
regression equation for calculating compounded annual growth rates.
1 For details, see Chapter I, Introduction: Theoretical Framework for Corporate Growth.
2 For details, see Chapter II, Review of Literature.
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4.1.1 Firm Wise Analysis
Table 4.1 and 4.2 show compounded annual growth rates of net sales and market
capitalisation of sample companies arranged in descending order.
Table 4.1 Compounded Annual Growth Rates of Net Sales (1993-94 to 2007-08)
Sr. No. Name of the Company Growth Rates
(Percent)
1 Reliance Industries Ltd. 35.33
2 Tata Motors Ltd. 9.68
3 Tata Steel Ltd. 8.17
4 Hindustan Unilever Ltd. 7.90
5 Larsen & Toubro Ltd. 7.57
6 Maruti Suzuki India Ltd. 7.07
7 Indian Petrochemicals Corpn. Ltd. [Merged] 5.39
8 Wipro Ltd. 4.84
9 I T C Ltd. 4.80
10 Tata Communications Ltd. 4.63
11 Grasim Industries Ltd. 4.19
12 Mahindra & Mahindra Ltd. 4.00
13 Infosys Technologies Ltd. 3.97
14 Bajaj Auto Ltd. 3.77
15 Ispat Industries Ltd. 3.61
16 Hero Honda Motors Ltd. 3.47
17 Bharti Airtel Ltd. 3.10
18 Essar Steel Ltd. 2.80
19 Ashok Leyland Ltd. 2.74
20 Ruchi Soya Inds. Ltd. 2.61
21 A C C Ltd. 2.60
Contd…
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Sr. No. Name of the Company Growth Rates
(Percent)
22 J S W Steel Ltd. 2.45
23 Ranbaxy Laboratories Ltd. 2.12
24 Satyam Computer Services Ltd. 2.10
25 Century Textiles & Inds. Ltd. 2.02
26 Gujarat State Fertilizers & Chemicals Ltd. 1.97
27 Aditya Birla Nuvo Ltd. 1.94
28 Tata Chemicals Ltd. 1.72
29 T V S Motor Co. Ltd. 1.68
30 Crompton Greaves Ltd. 1.60
31 Bosch Ltd. 1.53
32 Nestle India Ltd. 1.53
33 Siemens Ltd. 1.50
34 Chambal Fertilisers & Chemicals Ltd. 1.41
35 Ambuja Cements Ltd. 1.38
36 A B B Ltd. 1.34
37 Nirma Ltd. 1.31
38 Gujarat Narmada Valley Fertilizers Co. Ltd. 1.30
39 Indo Rama Synthetics (India) Ltd. 1.28
40 Cipla Ltd. 1.18
41 Escorts Ltd. 1.17
42 Zuari Industries Ltd. 1.15
43 Bhushan Steel Ltd. 1.14
44 Britannia Industries Ltd. 1.08
45 Raymond Ltd. 1.08
46 Dr. Reddy'S Laboratories Ltd. 1.07
47 Voltas Ltd. 1.07
Contd…
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Sr. No. Name of the Company Growth Rates
(Percent)
48 H C L Technologies Ltd. 1.07
49 Nagarjuna Fertilizers & Chemicals Ltd. 1.06
50 D C M Shriram Consolidated Ltd. 1.05
51 Arvind Mills Ltd. 1.04
52 India Cements Ltd. 0.99
53 Kesoram Industries Ltd. 0.98
54 Glaxosmithkline Pharmaceuticals Ltd. 0.97
55 Jindal Iron & Steel Co. Ltd. [Merged] 0.96
56 B P L Ltd. 0.95
57 Mukand Ltd. 0.94
58 Colgate-Palmolive (India) Ltd. 0.92
59 Tube Investments Of India Ltd. 0.90
60 Hindustan Motors Ltd. 0.87
61 Cummins India Ltd. 0.86
62 Vardhman Textiles Ltd. 0.86
63 Dabur India Ltd. 0.85
64 Godavari Fertilisers & Chemicals Ltd. 0.85
65 Rallis India Ltd. 0.84
66 Bombay Dyeing & Mfg. Co. Ltd. 0.83
67 Uttam Galva Steels Ltd. 0.81
68 E I D-Parry (India) Ltd. 0.81
69 Whirlpool Of India Ltd. 0.79
70 Kirloskar Oil Engines Ltd. 0.79
71 Jindal Saw Ltd. 0.79
72 Coromandel Fertilisers Ltd. 0.78
73 I C I India Ltd. 0.77
Contd…
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Sr. No. Name of the Company Growth Rates
(Percent)
74 Oswal Chemicals & Fertilizers Ltd. 0.73
75 Exide Industries Ltd. 0.73
76 Tata Tea Ltd. 0.73
77 Punjab Tractors Ltd. 0.72
78 Nocil Ltd. 0.71
79 Usha Martin Ltd. 0.71
80 Aurobindo Pharma Ltd. 0.71
81 S R F Ltd. 0.70
82 Videocon Appliances Ltd. 0.70
83 Bharat Forge Ltd. 0.68
84 Eicher Motors Ltd. 0.68
85 Agro Tech Foods Ltd. 0.68
86 Mirc Electronics Ltd. 0.68
87 J C T Ltd. 0.68
88 Titan Industries Ltd. 0.68
89 Jubilant Organosys Ltd. 0.67
90 Lakshmi Machine Works Ltd. 0.67
91 Nicholas Piramal India Ltd. 0.66
92 Century Enka Ltd. 0.64
93 Thermax Ltd. 0.64
94 Eveready Industries (India) Ltd. 0.64
95 Force Motors Ltd. 0.63
96 Marico Ltd. 0.62
97 Godrej Industries Ltd. 0.62
98 Godrej Industries Ltd. 0.62
99 Jindal Poly Films Ltd. 0.62
Contd…
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Sr. No. Name of the Company Growth Rates
(Percent)
100 Sesa Goa Ltd. 0.62
101 Glaxosmithkline Consumer Healthcare Ltd. 0.61
102 Greaves Cotton Ltd. 0.61
103 Lupin Ltd. 0.60
104 Blue Star Ltd. 0.60
105 Madras Cements Ltd. 0.59
106 Hindustan Construction Co. Ltd. 0.59
107 Alok Industries Ltd. 0.58
108 C M C Ltd. 0.58
109 Nagarjuna Construction Co. Ltd. 0.57
110 Sun Pharmaceutical Inds. Ltd. 0.57
111 Gammon India Ltd. 0.57
112 Wockhardt Ltd. 0.56
113 Finolex Industries Ltd. 0.56
114 I-Flex Solutions Ltd. 0.55
115 Areva T & D India Ltd. 0.54
116 J K Lakshmi Cement Ltd. 0.54
117 Novartis India Ltd. 0.53
118 Tamilnadu Petroproducts Ltd. 0.53
119 P S L Ltd. 0.53
120 Gujarat Ambuja Exports Ltd. 0.53
121 Aventis Pharma Ltd. 0.52
122 J K Synthetics Ltd. 0.52
123 Supreme Petrochem Ltd. 0.52
124 Himachal Futuristic Communications Ltd. 0.51
125 Micro Inks Ltd. 0.51
126 L M L Ltd. 0.51
Contd…
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Sr. No. Name of the Company Growth Rates
(Percent)
127 R S W M Ltd. 0.50
128 Atul Ltd. 0.50
129 Samtel Color Ltd. 0.49
130 Supreme Industries Ltd. 0.49
131 I V R C L Infrastructures & Projects Ltd. 0.48
132 Balrampur Chini Mills Ltd. 0.48
133 Sundram Fasteners Ltd. 0.47
134 Kirloskar Brothers Ltd. 0.47
135 Godfrey Phillips India Ltd. 0.46
136 Finolex Cables Ltd. 0.46
137 Tata Infotech Ltd. [Merged] 0.46
138 N I I T Ltd. 0.44
139 Garden Silk Mills Ltd. 0.43
140 H E G Ltd. 0.43
141 Sunflag Iron & Steel Co. Ltd. 0.43
142 United Phosphorus Ltd. 0.43
143 J B F Industries Ltd. 0.42
144 Shree Cement Ltd. 0.42
145 Deepak Fertilisers & Petrochemicals Corpn. Ltd. 0.42
146 Wheels India Ltd. 0.42
147 Chemplast Sanmar Ltd. 0.41
148 Bajaj Hindusthan Ltd. 0.41
149 Unitech Ltd. 0.41
150 Alembic Ltd. 0.41
151 Ipca Laboratories Ltd. 0.40
152 Procter & Gamble Hygiene & Health Care Ltd. 0.40
153 B A S F India Ltd. 0.39
Contd…
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Sr. No. Name of the Company Growth Rates
(Percent)
154 G H C L Ltd. 0.39
155 Shree Precoated Steels Ltd. 0.39
156 Orchid Chemicals & Pharmaceuticals Ltd. 0.38
157 Torrent Pharmaceuticals Ltd. 0.38
158 Dhampur Sugar Mills Ltd. 0.38
159 Ingersoll-Rand (India) Ltd. 0.37
160 Forbes & Co. Ltd. 0.37
161 Polaris Software Lab Ltd. 0.37
162 Maharashtra Seamless Ltd. 0.36
163 Sintex Industries Ltd. 0.36
164 Clariant Chemicals (India) Ltd. 0.36
165 Nahar Spinning Mills Ltd. 0.36
166 Dalmia Cement (Bharat) Ltd. 0.35
167 Pfizer Ltd. 0.35
168 Subros Ltd. 0.34
169 Zee Entertainment Enterprises Ltd. 0.34
170 Recron Synthetics Ltd. [Merged] 0.33
171 O C L India Ltd. 0.33
172 Kohinoor Foods Ltd. 0.33
173 Vardhman Holdings Ltd. 0.33
174 Welspun India Ltd. 0.32
175 Kalpataru Power Transmission Ltd. 0.32
176 Abhishek Industries Ltd. 0.32
177 Aarti Industries Ltd. 0.32
178 Andhra Sugars Ltd. 0.31
179 Eicher Ltd. 0.31
180 Kalyani Steels Ltd. 0.31
Contd…
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Sr. No. Name of the Company Growth Rates
(Percent)
181 Apollo Hospitals Enterprise Ltd. 0.31
182 Abbott India Ltd. 0.31
183 Rico Auto Inds. Ltd. 0.30
184 Bannari Amman Sugars Ltd. 0.30
185 Havells India Ltd. 0.29
186 Motherson Sumi Systems Ltd. 0.29
187 B O C India Ltd. 0.29
188 Sundaram-Clayton Ltd. 0.29
189 Alfa Laval (India) Ltd. 0.29
190 Swaraj Mazda Ltd. 0.29
191 Jyoti Structures Ltd. 0.28
192 Pentamedia Graphics Ltd. 0.28
193 Citigroup Global Services Ltd. 0.28
194 Graphite India Ltd. 0.27
195 Kanoria Chemicals & Inds. Ltd. 0.27
196 Chettinad Cement Corpn. Ltd. 0.27
197 Man Industries (India) Ltd. 0.27
198 Munjal Showa Ltd. 0.27
199 Merck Ltd. 0.27
200 Glenmark Pharmaceuticals Ltd. 0.26
201 India Glycols Ltd. 0.26
202 Patel Engineering Ltd. 0.26
203 Nahar Investments & Holding Ltd. 0.26
204 Hexaware Technologies Ltd. 0.26
205 Clariant (India) Ltd. [Merged] 0.26
206 Ambuja Cement Eastern Ltd. [Merged] 0.26
Contd…
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Sr. No. Name of the Company Growth Rates
(Percent)
207 V S T Industries Ltd. 0.26
208 Panacea Biotec Ltd. 0.26
209 Savita Chemicals Ltd. 0.25
210 Omax Autos Ltd. 0.25
211 Gabriel India Ltd. 0.25
212 Rolta India Ltd. 0.25
213 Honeywell Automation India Ltd. 0.25
214 Matrix Laboratories Ltd. 0.24
215 Gillette India Ltd. 0.24
216 Monnet Ispat & Energy Ltd. 0.24
217 Pricol Ltd. 0.24
218 Federal-Mogul Goetze (India) Ltd. 0.24
219 Unichem Laboratories Ltd. 0.24
220 Atlas Copco (India) Ltd. 0.23
221 J B Chemicals & Pharmaceuticals Ltd. 0.23
222 E K L Appliances Ltd. [Merged] 0.22
223 Amtek Auto Ltd. 0.22
224 Wyeth Ltd. 0.22
225 Wartsila India Ltd. 0.22
226 F A G Bearings India Ltd. 0.22
227 Elder Pharmaceuticals Ltd. 0.22
228 Morepen Laboratories Ltd. 0.21
229 Lanxess A B S Ltd. 0.21
230 K S B Pumps Ltd. 0.20
231 L G Balakrishnan & Bros. Ltd. 0.20
232 Kopran Ltd. 0.20
233 Elgi Equipments Ltd. 0.20
Contd…
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Sr. No. Name of the Company Growth Rates
(Percent)
234 Nippo Batteries Co. Ltd. 0.20
235 Sterling Biotech Ltd. 0.19
236 Ramco Industries Ltd. 0.19
237 Denso India Ltd. 0.19
238 Shasun Chemicals & Drugs Ltd. 0.19
239 Sona Koyo Steering Systems Ltd. 0.19
240 Kennametal India Ltd. 0.19
241 Bosch Chassis Systems India Ltd. 0.19
242 Navneet Publications (India) Ltd. 0.18
243 F D C Ltd. 0.18
244 Monsanto India Ltd. 0.18
245 Kothari Products Ltd. 0.18
246 Henkel Spic India Ltd. [Merged] 0.17
247 Narmada Chematur Petrochemicals Ltd. [Merged] 0.17
248 Automotive Axles Ltd. 0.16
249 Burroughs Wellcome (India) Ltd. [Merged] 0.16
250 Williamson Tea Assam Ltd. [Merged] 0.15
251 Goodricke Group Ltd. 0.15
252 Emami Ltd. 0.15
253 Honda Siel Power Products Ltd. 0.15
254 Tata Elxsi Ltd. 0.15
255 Esab India Ltd. 0.14
256 Ucal Fuel Systems Ltd. 0.14
257 Amforge Industries Ltd. 0.14
258 Tata Coffee Ltd. 0.14
259 Aarti Drugs Ltd. 0.14
Contd…
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Sr. No. Name of the Company Growth Rates
(Percent)
260 Hindustan Powerplus Ltd. 0.13
261 Natco Pharma Ltd. 0.13
262 Maharashtra Scooters Ltd. 0.13
263 Polyplex Corporation Ltd. 0.12
264 Mastek Ltd. 0.12
265 Zensar Technologies Ltd. 0.12
266 Praj Industries Ltd. 0.12
267 Sonata Software Ltd. 0.12
268 Shyam Telecom Ltd. 0.12
269 S S I Ltd. 0.11
270 Astrazeneca Pharma India Ltd. 0.11
271 Gujarat Fluorochemicals Ltd. 0.11
272 Infotech Enterprises Ltd. 0.11
273 Max India Ltd. 0.11
274 Fulford (India) Ltd. 0.10
275 H F C L Infotel Ltd. 0.10
276 Rane Brake Linings Ltd. 0.10
277 Visualsoft Technologies Ltd. [Merged] 0.10
278 Himatsingka Seide Ltd. 0.10
279 Munjal Auto Inds. Ltd. 0.09
280 Vesuvius India Ltd. 0.09
281 Hikal Ltd. 0.09
282 Zodiac Clothing Co. Ltd. 0.09
283 Infomedia India Ltd. 0.09
284 Bhansali Engineering Polymers Ltd. 0.09
285 Zandu Pharmaceutical Works Ltd. 0.09
Contd…
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Sr. No. Name of the Company Growth Rates
(Percent)
286 Swaraj Engines Ltd. 0.09
287 Hinduja Ventures Ltd. 0.09
288 Seamec Ltd. 0.09
289 Rane Engine Valves Ltd. 0.09
290 Aftek Ltd. 0.08
291 Foseco India Ltd. 0.08
292 Z F Steering Gear (India) Ltd. 0.08
293 Cranes Software Intl. Ltd. 0.07
294 Timex Group India Ltd. 0.07
295 Shanthi Gears Ltd. 0.07
296 Macmillan India Ltd. 0.07
297 C C L Products (India) Ltd. 0.07
298 N L C Nalco India Ltd. 0.06
299 Reliance Industrial Infrastructure Ltd. 0.06
300 Television Eighteen India Ltd. 0.05
301 Suven Life Sciences Ltd. 0.04
302 Krebs Biochemicals & Inds. Ltd. 0.04
303 Ray Ban Sun Optics India Ltd. 0.04
304 Financial Technologies (India) Ltd. 0.03
305 Gufic Biosciences Ltd. 0.02
306 Vimta Labs Ltd. 0.02
307 K Sera Sera Productions Ltd. 0.02
308 Sterling International Enterprises Ltd. 0.01
309 G G Dandekar Machine Works Ltd. 0.01
310 Netvision Web Technologies Ltd. 0.01
311 Media Matrix Worldwide Ltd. 0.01
312 Silicon Valley Infotech Ltd. 0.00
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Table 4.2 Compounded Annual Growth Rates of Market Capitalisation (1993-94 to
2007-08)
Sr. No. Name of the Company Growth Rates
(Percent)
1 Reliance Industries Ltd. 39.23
2 Wipro Ltd. 36.08
3 Bharti Airtel Ltd. 35.89
4 Infosys Technologies Ltd. 34.57
5 Hindustan Unilever Ltd. 30.33
6 I T C Ltd. 20.41
7 Maruti Suzuki India Ltd. 15.89
8 H C L Technologies Ltd. 13.75
9 Tata Steel Ltd. 9.63
10 Satyam Computer Services Ltd. 9.56
11 Tata Motors Ltd. 9.46
12 Larsen & Toubro Ltd. 9.28
13 Ranbaxy Laboratories Ltd. 8.06
14 Bajaj Auto Ltd. 7.72
15 Tata Communications Ltd. 6.35
16 I-Flex Solutions Ltd. 6.15
17 Grasim Industries Ltd. 5.66
18 Zee Entertainment Enterprises Ltd. 5.58
19 Cipla Ltd. 4.97
20 Hero Honda Motors Ltd. 4.62
21 Nestle India Ltd. 4.43
22 Sun Pharmaceutical Inds. Ltd. 4.07
23 A C C Ltd. 4.06
24 Ambuja Cements Ltd. 3.97
Contd…
Page 15
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Sr. No. Name of the Company Growth Rates
(Percent)
25 Dr. Reddy'S Laboratories Ltd. 3.89
26 Mahindra & Mahindra Ltd. 3.87
27 Glaxosmithkline Pharmaceuticals Ltd. 3.29
28 Colgate-Palmolive (India) Ltd. 3.26
29 Indian Petrochemicals Corpn. Ltd. [Merged] 3.23
30 Siemens Ltd. 3.06
31 Bosch Ltd. 2.91
32 A B B Ltd. 2.88
33 Tata Chemicals Ltd. 2.66
34 N I I T Ltd. 2.34
35 Nirma Ltd. 2.22
36 Dabur India Ltd. 2.16
37 Tata Tea Ltd. 2.01
38 Wockhardt Ltd. 1.86
39 Aditya Birla Nuvo Ltd. 1.79
40 Unitech Ltd. 1.77
41 Cummins India Ltd. 1.76
42 Century Textiles & Inds. Ltd. 1.75
43 Bharat Forge Ltd. 1.69
44 Ashok Leyland Ltd. 1.68
45 Nicholas Piramal India Ltd. 1.61
46 Glenmark Pharmaceuticals Ltd. 1.51
47 Glaxosmithkline Consumer Healthcare Ltd. 1.49
48 Polaris Software Lab Ltd. 1.47
49 J S W Steel Ltd. 1.43
50 Britannia Industries Ltd. 1.40
Contd…
Page 16
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Sr. No. Name of the Company Growth Rates
(Percent)
51 Procter & Gamble Hygiene & Health Care Ltd. 1.32
52 Aventis Pharma Ltd. 1.30
53 Novartis India Ltd. 1.30
54 Essar Steel Ltd. 1.23
55 Gillette India Ltd. 1.20
56 Himachal Futuristic Communications Ltd. 1.16
57 Financial Technologies (India) Ltd. 1.13
58 Raymond Ltd. 1.07
59 Crompton Greaves Ltd. 1.07
60 Sesa Goa Ltd. 1.06
61 Punjab Tractors Ltd. 1.05
62 T V S Motor Co. Ltd. 1.04
63 Pfizer Ltd. 1.01
64 Ingersoll-Rand (India) Ltd. 1.00
65 Arvind Mills Ltd. 0.98
66 Lupin Ltd. 0.96
67 Madras Cements Ltd. 0.96
68 Thermax Ltd. 0.95
69 Aurobindo Pharma Ltd. 0.95
70 India Cements Ltd. 0.90
71 Hexaware Technologies Ltd. 0.90
72 United Phosphorus Ltd. 0.87
73 Marico Ltd. 0.86
74 Visualsoft Technologies Ltd. [Merged] 0.84
75 Gujarat State Fertilizers & Chemicals Ltd. 0.82
76 Matrix Laboratories Ltd. 0.82
Contd…
Page 17
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Sr. No. Name of the Company Growth Rates
(Percent)
77 Bombay Dyeing & Mfg. Co. Ltd. 0.78
78 Rolta India Ltd. 0.77
79 Tata Infotech Ltd. [Merged] 0.76
80 Pentamedia Graphics Ltd. 0.74
81 Chambal Fertilisers & Chemicals Ltd. 0.74
82 Hinduja Ventures Ltd. 0.73
83 Titan Industries Ltd. 0.72
84 I C I India Ltd. 0.71
85 Gujarat Narmada Valley Fertilizers Co. Ltd. 0.70
86 Godrej Industries Ltd. 0.66
87 Lakshmi Machine Works Ltd. 0.66
88 Jubilant Organosys Ltd. 0.66
89 Jindal Saw Ltd. 0.64
90 Exide Industries Ltd. 0.64
91 Television Eighteen India Ltd. 0.64
92 Alfa Laval (India) Ltd. 0.63
93 S S I Ltd. 0.63
94 Wyeth Ltd. 0.62
95 Bajaj Hindusthan Ltd. 0.62
96 Torrent Pharmaceuticals Ltd. 0.62
97 Sundram Fasteners Ltd. 0.61
98 Balrampur Chini Mills Ltd. 0.60
99 Amtek Auto Ltd. 0.60
100 Abbott India Ltd. 0.59
101 C M C Ltd. 0.58
102 Ispat Industries Ltd. 0.58
Contd…
Page 18
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Sr. No. Name of the Company Growth Rates
(Percent)
103 Finolex Cables Ltd. 0.57
104 Max India Ltd. 0.57
105 Gammon India Ltd. 0.55
106 Mastek Ltd. 0.54
107 Nagarjuna Fertilizers & Chemicals Ltd. 0.54
108 Shree Cement Ltd. 0.54
109 Escorts Ltd. 0.53
110 Sundaram-Clayton Ltd. 0.53
111 Voltas Ltd. 0.53
112 Apollo Hospitals Enterprise Ltd. 0.53
113 Merck Ltd. 0.52
114 Finolex Industries Ltd. 0.52
115 Sterling Biotech Ltd. 0.52
116 Chettinad Cement Corpn. Ltd. 0.51
117 Macmillan India Ltd. 0.51
118 Emami Ltd. 0.51
119 Areva T & D India Ltd. 0.51
120 Kirloskar Brothers Ltd. 0.50
121 Motherson Sumi Systems Ltd. 0.49
122 I V R C L Infrastructures & Projects Ltd. 0.48
123 Monsanto India Ltd. 0.48
124 Godfrey Phillips India Ltd. 0.47
125 Hindustan Construction Co. Ltd. 0.46
126 Orchid Chemicals & Pharmaceuticals Ltd. 0.46
127 Micro Inks Ltd. 0.45
128 Vardhman Textiles Ltd. 0.45
Contd…
Page 19
63
Sr. No. Name of the Company Growth Rates
(Percent)
129 Panacea Biotec Ltd. 0.44
130 F D C Ltd. 0.42
131 Maharashtra Seamless Ltd. 0.42
132 Nagarjuna Construction Co. Ltd. 0.42
133 Indo Rama Synthetics (India) Ltd. 0.42
134 Tube Investments Of India Ltd. 0.41
135 Ambuja Cement Eastern Ltd. [Merged] 0.41
136 Ipca Laboratories Ltd. 0.41
137 Century Enka Ltd. 0.41
138 Kirloskar Oil Engines Ltd. 0.41
139 Gujarat Fluorochemicals Ltd. 0.41
140 E I D-Parry (India) Ltd. 0.40
141 Jindal Iron & Steel Co. Ltd. [Merged] 0.39
142 B A S F India Ltd. 0.38
143 Citigroup Global Services Ltd. 0.38
144 Sonata Software Ltd. 0.37
145 Himatsingka Seide Ltd. 0.37
146 S R F Ltd. 0.36
147 Atlas Copco (India) Ltd. 0.36
148 Force Motors Ltd. 0.35
149 Aftek Ltd. 0.35
150 Kesoram Industries Ltd. 0.35
151 Nocil Ltd. 0.34
152 Greaves Cotton Ltd. 0.34
153 Infotech Enterprises Ltd. 0.34
154 Kennametal India Ltd. 0.34
Contd…
Page 20
64
Sr. No. Name of the Company Growth Rates
(Percent)
155 D C M Shriram Consolidated Ltd. 0.34
156 Patel Engineering Ltd. 0.34
157 V S T Industries Ltd. 0.33
158 K S B Pumps Ltd. 0.33
159 Tata Elxsi Ltd. 0.33
160 Astrazeneca Pharma India Ltd. 0.33
161 Clariant Chemicals (India) Ltd. 0.32
162 Morepen Laboratories Ltd. 0.32
163 Cranes Software Intl. Ltd. 0.32
164 G H C L Ltd. 0.31
165 B P L Ltd. 0.31
166 Eveready Industries (India) Ltd. 0.31
167 Zensar Technologies Ltd. 0.31
168 Burroughs Wellcome (India) Ltd. [Merged] 0.31
169 Mukand Ltd. 0.31
170 B O C India Ltd. 0.30
171 J K Lakshmi Cement Ltd. 0.29
172 Kalyani Steels Ltd. 0.29
173 Dalmia Cement (Bharat) Ltd. 0.29
174 Sintex Industries Ltd. 0.28
175 Sintex Industries Ltd. 0.28
176 J B Chemicals & Pharmaceuticals Ltd. 0.28
177 Oswal Chemicals & Fertilizers Ltd. 0.28
178 Honeywell Automation India Ltd. 0.28
179 Blue Star Ltd. 0.28
180 Kalpataru Power Transmission Ltd. 0.28
Contd…
Page 21
65
Sr. No. Name of the Company Growth Rates
(Percent)
181 Zuari Industries Ltd. 0.28
182 Hindustan Motors Ltd. 0.27
183 Andhra Sugars Ltd. 0.27
184 H F C L Infotel Ltd. 0.27
185 Bhushan Steel Ltd. 0.27
186 Nahar Spinning Mills Ltd. 0.26
187 Whirlpool Of India Ltd. 0.26
188 Clariant (India) Ltd. [Merged] 0.26
189 Supreme Industries Ltd. 0.25
190 Jindal Poly Films Ltd. 0.25
191 Usha Martin Ltd. 0.25
192 Alok Industries Ltd. 0.25
193 Navneet Publications (India) Ltd. 0.25
194 Sterling International Enterprises Ltd. 0.25
195 J C T Ltd. 0.25
196 Wheels India Ltd. 0.25
197 Henkel Spic India Ltd. [Merged] 0.25
198 Unichem Laboratories Ltd. 0.25
199 Bosch Chassis Systems India Ltd. 0.25
200 Coromandel Fertilisers Ltd. 0.24
201 Forbes & Co. Ltd. 0.24
202 Wartsila India Ltd. 0.24
203 Rallis India Ltd. 0.24
204 Shree Precoated Steels Ltd. 0.24
205 Alembic Ltd. 0.24
206 Deepak Fertilisers & Petrochemicals Corpn. Ltd. 0.23
Contd…
Page 22
66
Sr. No. Name of the Company Growth Rates
(Percent)
207 Havells India Ltd. 0.23
208 Hikal Ltd. 0.22
209 Welspun India Ltd. 0.22
210 Rico Auto Inds. Ltd. 0.22
211 Eicher Motors Ltd. 0.22
212 Shyam Telecom Ltd. 0.22
213 Ramco Industries Ltd. 0.22
214 L M L Ltd. 0.22
215 H E G Ltd. 0.22
216 Tamilnadu Petroproducts Ltd. 0.21
217 Praj Industries Ltd. 0.21
218 Bannari Amman Sugars Ltd. 0.21
219 Tata Coffee Ltd. 0.21
220 Elder Pharmaceuticals Ltd. 0.21
221 Kopran Ltd. 0.21
222 Mirc Electronics Ltd. 0.21
223 Vesuvius India Ltd. 0.20
224 Agro Tech Foods Ltd. 0.20
225 Automotive Axles Ltd. 0.20
226 Seamec Ltd. 0.20
227 P S L Ltd. 0.19
228 F A G Bearings India Ltd. 0.19
229 Federal-Mogul Goetze (India) Ltd. 0.19
230 N L C Nalco India Ltd. 0.19
231 Williamson Tea Assam Ltd. [Merged] 0.18
232 Chemplast Sanmar Ltd. 0.18
Contd…
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Sr. No. Name of the Company Growth Rates
(Percent)
233 Goodricke Group Ltd. 0.18
234 Infomedia India Ltd. 0.18
235 Ruchi Soya Inds. Ltd. 0.18
236 India Glycols Ltd. 0.17
237 Elgi Equipments Ltd. 0.17
238 O C L India Ltd. 0.17
239 Esab India Ltd. 0.17
240 Graphite India Ltd. 0.17
241 Rane Engine Valves Ltd. 0.16
242 Vardhman Holdings Ltd. 0.16
243 Timex Group India Ltd. 0.16
244 Dhampur Sugar Mills Ltd. 0.16
245 Shasun Chemicals & Drugs Ltd. 0.16
246 Recron Synthetics Ltd. [Merged] 0.15
247 Atul Ltd. 0.15
248 Supreme Petrochem Ltd. 0.15
249 Abhishek Industries Ltd. 0.15
250 Pricol Ltd. 0.15
251 Garden Silk Mills Ltd. 0.15
252 Maharashtra Scooters Ltd. 0.14
253 Ray Ban Sun Optics India Ltd. 0.14
254 Monnet Ispat & Energy Ltd. 0.14
255 Sunflag Iron & Steel Co. Ltd. 0.14
256 Reliance Industrial Infrastructure Ltd. 0.14
257 Foseco India Ltd. 0.13
258 Hindustan Powerplus Ltd. 0.13
259 Samtel Color Ltd. 0.13
Contd…
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Sr. No. Name of the Company Growth Rates
(Percent)
260 Jyoti Structures Ltd. 0.13
261 Honda Siel Power Products Ltd. 0.13
262 Swaraj Engines Ltd. 0.13
263 Munjal Showa Ltd. 0.13
264 Zandu Pharmaceutical Works Ltd. 0.13
265 E K L Appliances Ltd. [Merged] 0.13
266 R S W M Ltd. 0.12
267 Natco Pharma Ltd. 0.12
268 Videocon Appliances Ltd. 0.12
269 Lanxess A B S Ltd. 0.12
270 Aarti Industries Ltd. 0.12
271 Sona Koyo Steering Systems Ltd. 0.12
272 Kothari Products Ltd. 0.12
273 C C L Products (India) Ltd. 0.11
274 Nippo Batteries Co. Ltd. 0.11
275 Bhansali Engineering Polymers Ltd. 0.11
276 Shanthi Gears Ltd. 0.11
277 Media Matrix Worldwide Ltd. 0.11
278 Denso India Ltd. 0.11
279 Swaraj Mazda Ltd. 0.11
280 Savita Chemicals Ltd. 0.11
281 J K Synthetics Ltd. 0.11
282 J B F Industries Ltd. 0.10
283 L G Balakrishnan & Bros. Ltd. 0.10
284 Gabriel India Ltd. 0.10
285 Nahar Investments & Holding Ltd. 0.10
286 Ucal Fuel Systems Ltd. 0.10
Contd…
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Sr. No. Name of the Company Growth Rates
(Percent)
287 Netvision Web Technologies Ltd. 0.10
288 Narmada Chematur Petrochemicals Ltd. [Merged] 0.10
289 Uttam Galva Steels Ltd. 0.10
290 Man Industries (India) Ltd. 0.10
291 Godavari Fertilisers & Chemicals Ltd. 0.10
292 Polyplex Corporation Ltd. 0.09
293 Kanoria Chemicals & Inds. Ltd. 0.09
294 Fulford (India) Ltd. 0.09
295 Eicher Ltd. 0.09
296 Suven Life Sciences Ltd. 0.09
297 Rane Brake Linings Ltd. 0.09
298 Kohinoor Foods Ltd. 0.08
299 Gufic Biosciences Ltd. 0.08
300 Munjal Auto Inds. Ltd. 0.08
301 Subros Ltd. 0.07
302 Vimta Labs Ltd. 0.07
303 Zodiac Clothing Co. Ltd. 0.07
304 Omax Autos Ltd. 0.07
305 Z F Steering Gear (India) Ltd. 0.06
306 Amforge Industries Ltd. 0.06
307 Krebs Biochemicals & Inds. Ltd. 0.06
308 Gujarat Ambuja Exports Ltd. 0.06
309 Aarti Drugs Ltd. 0.05
310 K Sera Sera Productions Ltd. 0.05
311 Silicon Valley Infotech Ltd. 0.04
312 G G Dandekar Machine Works Ltd. 0.02
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But before proceeding with the empirical validity of above listed growth rates, it is an
implied condition to check statistically the conformity of compounded growth rate
distributions to the normal distributions. For this purpose, Skewness and Kurtosis
statistics have been estimated, which represent good descriptive indices for measuring the
normality (see Beri, 2005, pp. 140-150). The Skewness index measures the degree of
symmetry of a distribution i.e. if 1 > 0 it is skewed to the right, while 1 < 0
corresponds the skewness towards left. Similarly, Kurtosis index measures the flatness or
the peakedness of the distribution. Hence, a distribution with 2 > 3 will have a thicker
tail than the normal distribution where as the distribution with 2 < 3 will exhibit a lighter
tail and a broader peak than the normal distribution. Table 4.3 summarizes the descriptive
statistics of compounded annual growth rate distributions measured in terms of net sales
and market capitalisation.
Table 4.3 Descriptive Statistics of Compounded Annual Growth Rate Distributions
Measures of Growth → CAGRNS CAGRMC
Minimum .00 .02
Maximum 35.33 39.23
Range 35.33 39.21
S.D 2.32 4.84
Skewness .01 .05
Kurtosis .308 .301
Number of firms 312 312
The results show that both the distributions (i.e. CAGRNS and CAGRMC) are positively
skewed, though the extent of skewness is marginal because 1 is greater than zero but
lesser than one (i.e. .01 and .05 respectively) in both measures of growth. Also, both
distributions are neither too much flattened nor much peaked than the normal
distribution. It is, because the kurtosis index is very near to the parameter of 3 (.308
and.301 respectively) in both distributions as per suggested rule of thumb. Thus, table 4.3
clearly shows that firm’s compounded growth rate distributions have broadly similar
shape with slight deviation from log normality.
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71
In order to examine the extent of corporate growth the companies under the study have
been divided into three categories on the basis of their growth rates. These categories
have been designated as High Growth Companies, Medium Growth Companies, and Low
Growth Companies. In order to identify the range of high, medium and low growth rates,
33.3 and 66.7 percent percentiles respectively have been calculated. Kumar (1982), Kaur
(1997), National Human Development Report (2005), Rajamohan (2006) and Ozonoff et
al. (2009) have also used similar percentiles for categorisation of the date of the sampling
unit related to their respective studies. Tables 4.4 and 4.5 show the distribution of
companies in three growth categories under both growth measures.
Table 4.4 Distributions of Companies According to CAGRNS (1993-94 to 2007-08),
N = 312
Growth
Category↓
Range of
Growth Rates
N Percentage
of
Companies
Mean Two
sample T
Test
High Growth Above .60 51 16 34.43 8.79*
Medium Growth .25 - .60 224 72 13.63 2.07*
Low Growth Below .25 37 12 1.55 0.87*
Note: N is Number of Companies.
* Significant at the 1 percent level.
Table 4.5 Distributions of Companies According to CAGRMC (1993-94 to 2007-08),
N = 312
Growth
Category↓
Range of
Growth Rates
N Percentage
of
Companies
Mean Two
sample T
Test
High Growth Above .57 64 20 32.63 7.71*
Medium Growth .22 - .57 221 71 13.91 2.18*
Low Growth Below .22 27 9 0.73 0.89*
Note: N is Number of Companies.
* Significant at the 1 percent level.
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4.1.1.1 High Growth Companies
Tables 4.4 and 4.5 reveal that high growth companies are those that have recorded
compounded annual growth rate of above 0.60 percent in case of net sales and 0.57
percent in case of market capitalisation. Out of a total of 312 companies in both
distributions, 51 companies (constituting 16 percent of total companies) in case of
net sales and 64 companies (constituting 20 percent of total companies) in case of
market capitalisation have been designated as high growth companies. The highest
rate of compounded growth i.e. 35.33 percent in case of net sales and 39.23 percent
in case of market capitalisation has been recorded by Reliance Industries ltd.
Followed by Reliance Industries ltd; Tata Motors Ltd., Tata Steel Ltd., Hindustan
Unilever Ltd., Larsen & Toubro Ltd., Maruti Suzuki India Ltd., Wipro Ltd., Indian
Petrochemicals Corp. Ltd. [Merged], I T C Ltd., Tata Communications Ltd., Grasim
Industries Ltd., Mahindra & Mahindra Ltd., Infosys Technologies Ltd., Bajaj Auto
Ltd., Ispat Industries Ltd., Hero Honda Motors Ltd., Bharti Airtel Ltd., Essar Steel
Ltd., Ashok Leyland Ltd., Ruchi Soya Inds. Ltd., A C C Ltd., J S W Steel Ltd.,
Ranbaxy Laboratories Ltd., Satyam Computer Services Ltd., Century Textiles &
Inds. Ltd., Gujarat State Fertilizers & Chemicals Ltd., Aditya Birla Nuvo Ltd., Tata
Chemicals Ltd., T V S Motor Co. Ltd., Crompton Greaves Ltd., Bosch Ltd., Nestle
India Ltd., Siemens Ltd., Chambal Fertilisers & Chemicals Ltd., Ambuja Cements
Ltd., A B B Ltd., Nirma Ltd., Gujarat Narmada Valley Fertilizers Co. Ltd., Indo
Rama Synthetics (India) Ltd., Cipla Ltd., Escorts Ltd., Zuari Industries Ltd.,
Bhushan Steel Ltd., Britannia Industries Ltd., Raymond Ltd., Dr. Reddy'S
Laboratories Ltd., Voltas Ltd., H C L Technologies Ltd., Nagarjuna Fertilizers &
Chemicals Ltd., D C M Shriram Consolidated Ltd., and Arvind Mills Ltd. are the
high growth companies.
4.1.1.2 Medium Growth Companies
Tables 4.4 and 4.5 exhibit that medium growth companies are those that have
recorded compounded annual growth rate ranging between 0.25 and 0.60 percent in
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case of net sales and 0.22 and 0.57 percent in case of market capitalisation. Out of a
total of 312 companies in both distributions, majority of companies i.e. 224
(constituting 72 percent of total companies) in case of net sales and 221 companies
(constituting 71 percent of total companies) in case of market capitalisation have
been designated as medium growth companies. India Cements Ltd., Kesoram
Industries Ltd., Glaxosmithkline Pharmaceuticals Ltd., Jindal Iron & Steel Co. Ltd.
[Merged], B P L Ltd., Mukand Ltd., Colgate-Palmolive (India) Ltd., Tube
Investments Of India Ltd., Hindustan Motors Ltd., Cummins India Ltd., Vardhman
Textiles Ltd., Dabur India Ltd., Godavari Fertilisers & Chemicals Ltd., Rallis India
Ltd., Bombay Dyeing & Mfg. Co. Ltd., Uttam Galva Steels Ltd., E I D-Parry (India)
Ltd., Whirlpool Of India Ltd., Kirloskar Oil Engines Ltd., Jindal Saw Ltd.,
Coromandel Fertilisers Ltd., I C I India Ltd., Oswal Chemicals & Fertilizers Ltd.,
Exide Industries Ltd., Tata Tea Ltd., Punjab Tractors Ltd., Nocil Ltd., Usha Martin
Ltd., Aurobindo Pharma Ltd., S R F Ltd., Videocon Appliances Ltd., Bharat Forge
Ltd., Eicher Motors Ltd., Agro Tech Foods Ltd., Mirc Electronics Ltd., J C T Ltd.,
Titan Industries Ltd., Jubilant Organosys Ltd., Lakshmi Machine Works Ltd.,
Nicholas Piramal India Ltd., Century Enka Ltd., Thermax Ltd., Eveready Industries
(India) Ltd., Force Motors Ltd., Marico Ltd., Godrej Industries Ltd., Jindal Poly
Films Ltd., Sesa Goa Ltd., Glaxosmithkline Consumer Healthcare Ltd., Greaves
Cotton Ltd., Lupin Ltd., Blue Star Ltd., Madras Cements Ltd., Hindustan
Construction Co. Ltd., Alok Industries Ltd., C M C Ltd., Nagarjuna Construction Co.
Ltd., Sun Pharmaceutical Inds. Ltd., Gammon India Ltd., Wockhardt Ltd., Finolex
Industries Ltd., I-Flex Solutions Ltd., Areva T & D India Ltd., J K Lakshmi Cement
Ltd., Novartis India Ltd., Tamilnadu Petroproducts Ltd., P S L Ltd., Finolex Cables
Ltd., Tata Infotech Ltd. [Merged], N I I T Ltd., H E G Ltd., Sunflag Iron & Steel Co.
Ltd., United Phosphorus Ltd., J B F Industries Ltd., Shree Cement Ltd., Deepak
Fertilisers & Petrochemicals Corpn. Ltd., Wheels India Ltd., Chemplast Sanmar Ltd.,
Bajaj Hindusthan Ltd., Unitech Ltd., Alembic Ltd., Ipca Laboratories Ltd., Procter &
Gamble Hygiene & Health Care Ltd., B A S F India Ltd., G H C L Ltd., Shree
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Precoated Steels Ltd., Orchid Chemicals & Pharmaceuticals Ltd., Torrent
Pharmaceuticals Ltd., Dhampur Sugar Mills Ltd., Ingersoll-Rand (India) Ltd., Forbes
& Co. Ltd., Polaris Software Lab Ltd., Maharashtra Seamless Ltd., Sintex Industries
Ltd., Clariant Chemicals (India) Ltd., Nahar Spinning Mills Ltd., Dalmia Cement
(Bharat) Ltd., Pfizer Ltd., Subros Ltd., Zee Entertainment Enterprises Ltd., Recron
Synthetics Ltd. [Merged], O C L India Ltd., Kohinoor Foods Ltd., Vardhman
Holdings Ltd., Welspun India Ltd., Kalpataru Power Transmission Ltd., Abhishek
Industries Ltd., Aarti Industries Ltd., Andhra Sugars Ltd., Eicher Ltd., Kalyani S teels
Ltd., Apollo Hospitals Enterprise Ltd., Abbott India Ltd., Rico Auto Inds. Ltd.,
Bannari Amman Sugars Ltd., Havells India Ltd., Motherson Sumi Systems Ltd., B O
C India Ltd., Sundaram-Clayton Ltd., Alfa Laval (India) Ltd., Swaraj Mazda Ltd.,
Jyoti Structures Ltd., Pentamedia Graphics Ltd., Citigroup Global Services Ltd.,
Graphite India Ltd., Kanoria Chemicals & Inds. Ltd., Chettinad Cement Corpn. Ltd.,
Man Industries (India) Ltd., Munjal Showa Ltd., Merck Ltd., Glenmark
Pharmaceuticals Ltd., India Glycols Ltd., Patel Engineering Ltd., Nahar Investments
& Holding Ltd., Hexaware Technologies Ltd., Clariant (India) Ltd. [Merged],
Ambuja Cement Eastern Ltd. [Merged], V S T Industries Ltd., Panacea Biotec Ltd.,
Savita Chemicals Ltd., Omax Autos Ltd., Gabriel India Ltd., Rolta India Ltd.,
Honeywell Automation India Ltd., Matrix Laboratories Ltd., Gillette India Ltd.,
Monnet Ispat & Energy Ltd., Pricol Ltd., Federal-Mogul Goetze (India) Ltd.,
Unichem Laboratories Ltd., Atlas Copco (India) Ltd., J B Chemicals &
Pharmaceuticals Ltd., E K L Appliances Ltd. [Merged], Amtek Auto Ltd., Wyeth
Ltd., Wartsila India Ltd., F A G Bearings India Ltd., Elder Pharmaceuticals Ltd.,
Morepen Laboratories Ltd., Lanxess A B S Ltd., K S B Pumps Ltd., L G
Balakrishnan & Bros. Ltd., Kopran Ltd., Elgi Equipments Ltd., Nippo Batteries Co.
Ltd., Sterling Biotech Ltd., Ramco Industries Ltd., Denso India Ltd., Shasun
Chemicals & Drugs Ltd., Sona Koyo Steering Systems Ltd., Kennametal India Ltd.,
Bosch Chassis Systems India Ltd., Navneet Publications (India) Ltd., F D C Ltd.,
Monsanto India Ltd., Kothari Products Ltd., Henkel Spic India Ltd. [Merged],
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Narmada Chematur Petrochemicals Ltd. [Merged], Automotive Axles Ltd.,
Burroughs Wellcome (India) Ltd. [Merged], Williamson Tea Assam Ltd. [Merged],
Goodricke Group Ltd., Emami Ltd., Honda Siel Power Products Ltd., Tata Elxsi
Ltd., Esab India Ltd., Ucal Fuel Systems Ltd., Amforge Industries Ltd., Tata Coffee
Ltd., Aarti Drugs Ltd., Hindustan Powerplus Ltd., Natco Pharma Ltd., Maharashtra
Scooters Ltd., Polyplex Corporation Ltd., Mastek Ltd., Zensar Technologies Ltd.,
Praj Industries Ltd., Sonata Software Ltd., Shyam Telecom Ltd., S S I Ltd.,
Astrazeneca Pharma India Ltd., Gujarat Fluorochemicals Ltd., Infotech Enterprises
Ltd., Max India Ltd., Fulford (India) Ltd., and H F C L Infotel Ltd. are the medium
growth companies.
4.1.1.3 Low Growth Companies
Tables 4.4 and 4.5 show that low growth companies are those that have recorded
compounded annual growth rate of below 0.25 percent in case of net sales and below
0.22 percent in case of market capitalisation. Out of a total of 312 companies in both
distributions, only 37 companies (constituting 12 percent of total companies) in case
of net sales and 27 companies (constituting 9 percent of total companies) in case of
market capitalisation have been designated as low growth companies. Rane Brake
Linings Ltd., Visualsoft Technologies Ltd. [Merged], Himatsingka Seide Ltd.,
Munjal Auto Inds. Ltd., Vesuvius India Ltd., Hikal Ltd., Zodiac Clothing Co. Ltd.,
Infomedia India Ltd., Bhansali Engineering Polymers Ltd., Zandu Pharmaceutical
Works Ltd., Swaraj Engines Ltd., Hinduja Ventures Ltd., Seamec Ltd., Rane Engine
Valves Ltd., Aftek Ltd., Foseco India Ltd., Z F Steering Gear (India) Ltd., Cranes
Software Intl. Ltd., Timex Group India Ltd., Shanthi Gears Ltd., Macmillan India
Ltd., C C L Products (India) Ltd., N L C Nalco India Ltd., Reliance Industrial
Infrastructure Ltd., Television Eighteen India Ltd., Suven Life Sciences Ltd., Krebs
Biochemicals & Inds. Ltd., Ray Ban Sun Optics India Ltd., Financial Technologies
(India) Ltd., Gufic Biosciences Ltd., Vimta Labs Ltd., K Sera Sera Productions Ltd.,
Sterling International Enterprises Ltd., G G Dandekar Machine Works Ltd.,
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Netvision Web Technologies Ltd., Media Matrix Worldwide Ltd., and Silicon Valley
Infotech Ltd. have been found in low growth companies.
Thus forgoing analysis has revealed that the distribution of the companies in
different growth categories (i.e. high, medium and low) varies drastically i.e. 51:
224: 37 in case of net sales and 64: 221: 27 in case of market capitalisation.
Further, tables 4.4 and 4.5 also show that high growth companies have recorded
maximum mean growth rates (34.43 percent in case of net sales and 63.63 percent in
case of market capitalisation) followed by the medium growth companies (13.63
percent in case of net sales and 13.91 percent in case of market capitalisation) and
thereafter low growth companies (1.55 percent in case of net sales and 0.73 percent
in case of market capitalisation).
Also, two sample t – test has been run to test whether significant differences exist
between mean growth rates of companies in both growth distributions (i.e. CAGRNS
and CAGRMC). It has revealed that there exists significant difference in mean
growth rates of high and medium growth companies; high and low growth
companies; and medium and low growth companies at 1 percent level, whether the
growth is measured by compounded annual growth rate of net sales or market
capitalisation. Thus the firm’s wise analysis has revealed that the pattern of growth
of sampled companies varies from firm to firm.
4.1.2 Industry Wise Analysis
Industry also plays a pivotal role in analyzing the pattern of corporate growth. Thus,
an attempt has been made here to analyze the growth behaviour of selected firm’s
vis-à-vis their industry characteristics.
Tables 4.6 and 4.7 show the distribution of the companies under industry groups
based on compounded annual growth rates of net sales and market capitalisation
along with the mean growth rate and standard deviation of respective industry.
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77
Tables 4.6 and 4.7 reveal that some industries are consistently outperforming than others
whether the growth is measured by compounded annual growth rate of net sales or
market capitalisation. The highest mean compounded growth rates have been noticed in
case of software, IT &ITES industry (39 in net sales and 42.34 in market capitalisation),
followed by life sciences & pharmaceutical industry (38.22 in net sales and 38.60 in
market capitalisation), entertainment and media industry (34.26 in net sales and 31.56 in
market capitalisation), petrochemical industry (31.39 in net sales and 30.32 in market
capitalisation), steel industry (14.52 in net sales and 19.84 in market capitalisation),
automotive industry (10.53 in net sales and 15.24 in market capitalisation), cement
industry (10.06 in net sales and 14.10 in market capitalisation) and FMCGs industry (7.56
in net sales and 11.30 in market capitalisation). Hence these are called the ‘high tech
industries or the core industries’ of Indian economy. Over the past decade, information
technology industry has become one of the fastest growing industries in India. Strong
demand over the past few years has placed India amongst the fastest growing IT markets
in the Asia- Pacific region. The Indian software and ITES industry has grown at a CAGR
of 28 percent during the last five years. The Indian pharmaceutical industry is also
emerging as the global hub for contract research and manufacturing services due to a
combination of low-cost and world-class quality standards. According to a study by Ernst
& Young, the total market for clinical research activities in India is expected to touch
$1.5-2 billion by 2010. Also, A.T. Kearney has listed India second (just after China) for
attractiveness as a clinical trials centre (IBEF, Pharmaceuticals, December 2008).
The Indian Entertainment and Media (E&M) industry is undergoing remarkable change
and is today one of the fastest growing sectors in the country. The entertainment industry
is a perfect blend of creativity and commerce and provides vast investment opportunities.
According to a report by FICCI and Pricewaterhouse Coopers, the Indian entertainment
and media industry is poised to become INR one trillion (INR 100,000 crore) industry by
2011. The industry is estimated to be worth INR 43,700 crore currently. Further, the
automotive industry has recorded growth of 13.56 percent in 2006-07. Vehicle
production grew at 8.78 percent in April – May 2008 over April – May 2007 (Subbiah
and Jeyakumar, 2009). Also, since steel is vital to the development of any modern
economy and is considered to be the backbone of the human civilization. International
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Table 4.6 Compounded Annual Growth Rates of Net Sales by Industry Groups
Growth Rate (Percent)
Agro Automotive Cap &
Eng
Cement Chemical FMCGs Entertainment & Media
Petro Chemical
Life Sciences & Pharmaceutical
Software, IT &ITES
Steel Textile Total
Below 0.10 - 5 6 - 2 3 6 1 7 8 - 1 39
0.10 - 0.19 1 8 4 1 1 6 2 2 8 6 - 1 40
0.19 – 0.27 3 7 8 2 4 3 - - 10 2 1 1 41
0.27 – 0.38 3 6 7 2 3 1 1 1 5 3 2 7 41
0.38 – 0.53 6 3 5 1 4 2 1 5 3 2 3 3 38
0.53 – 0.71 - 3 8 2 2 4 - 2 6 2 2 3 34
0.71- 1.26 7 3 4 2 1 5 - 1 4 1 6 4 38
Above 1.26 5 8 4 3 1 3 3 3 1 3 4 3 41
Total 25 43 46 13 18 27 13 15 44 27 18 23 312
Mean 9.81 10.53 5.99 10.06 4.31 7.56 34.26 31.39 38.22 39 14.52 8.07
S.D. 0.97 1.93 1.11 1.16 0.38 1.38 9.69 9.00 0.39 1.18 1.92 0.88
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Table 4.7 Compounded Annual Growth Rates of Market Capitalisation by Industry Groups
Growth Rate (Percent)
Agro Automotive Cap &
Eng
Cement Chemical FMCGs Entertainment & Media
Petro Chemical
Life Sciences & Pharmaceutical
Software, IT &ITES
Steel Textile Total
Below 0.11 2 11 4 - 2 2 2 4 4 2 1 3 37
0.11 – 0.18 2 7 6 1 6 7 - 1 2 - 2 5 39
0.18 – 0.25 4 7 6 1 1 6 2 2 5 - 2 2 38
0.25 – 0.33 4 2 5 2 2 3 2 3 4 5 4 4 40
0.33 – 0.51 5 2 11 2 3 - - 2 10 3 3 3 44
0.51 – 0.76 5 4 6 1 3 3 2 1 5 5 2 - 37
0.76 – 1.78 2 4 5 2 - 5 1 - 7 6 3 4 39
Above 1.78 1 6 3 3 1 5 4 2 4 6 1 2 38
Total 25 43 46 12 18 31 13 15 41 27 18 23 312
Mean 11.96 15.24 6.36 14.1 4.38 11.3 31.56 30.32 38.6 42.34 19.84 6.84
S.D. 4.008 3.012 1.438 1.853 0.59 5.404 1.375 1.004 1.126 9.497 2.191 1.19
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Iron and Steel Institute (IISI) have ranked India as the seventh largest steel producer in
the world with an overall production of about 40 million tones in 2006.
However, mean compounded growth rates have been recorded minimum in chemical
industry (4.31 in net sales and 4.38 in market capitalisation), followed by capital and
engineering goods industry (5.99 in net sales and 6.36 in market capitalisation) and
thereafter textile industry (8.07 in net sales and 6.84 in market capitalisation).
Thus on the canvas of Indian economy high growth industries (i.e. software, IT & ITES
industry, life sciences & pharmaceutical industry, media & entertainment industry and
automotive industry etc.) occupy a prominent place. Due to their deep forward and
backward linkages with several key segments of the economy, these industries have a
strong multiplier effect and are capable enough to drive the economic growth.
In nutshell the extent of corporate growth varies from firm to firm and industry to
industry whether the growth is measured by compounded annual growth rate of net sales
or market capitalisation.
