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Reliance group tops in big three league table on net, cash profits

Group’s Q1 cash, net profits more than that of Tata, A V Birla groups combined

E-Tex Staff - Mumbai

The first quarter results are out. And it’s been a rather encouraging one for corporate India. And for the big three corporate groups - Reliance, Tata and A V Birla - the league table throws up interesting figures as well. The Reliance group has finished at the top of the heap by far, with its cash and net profits more than the combined cash and net profits of the two other major business groups, the Tata and A V Birla conglomerates.

Reliance Industries, the group flagship, recently announced its first quarter figures, unveiling a cash profit alone of a staggering Rs 1,974 crore. A broad analysis of the profit figures thrown up by all the three major groups shows that the total net profit of the Reliance group stands at Rs 1,255 crore, that of the Tata group at Rs 615 crore and the A V Birla group at Rs 386 crore.

This puts the Reliance group’s net profit at more than the net profits of the Tata and Birla groups put together. Similar is the case on the cash profits front. The total cash profit of the Reliance group in the first quarter of 2003-04 stands at Rs 2,320.8 crore, more than the total cash profit of the Tata group (Rs 1,162.6 crore) and the Birla group (Rs 627.6 crore) put together. The Reliance group figures under consideration come from five companies - flagship Reliance Industries, Indian Petrochemicals Corporation, BSES, Reliance Capital, and Reliance Industrial Infrastructure.

The figures for the Tata group are drawn from 22 group companies. Figures for six others are not available. Figures of the A V Birla group are drawn from seven companies. Some analysts point out that it’s natural for the Reliance group to dominate the group league tables because their businesses are of huge size and scale, and the toplines are, therefore, massive. Says Abhay Aima, head, equities nd private banking group, HDFC Bank, “Their businesses are of international size and well-planned integration of their businesses has helped them to maintain the topline.” But some are looking beyond league standings and sensing a turnaround for India Inc in these results. Says ICICIDirect.com COO, Mr Anup Bagchi, “One good thing about all the three major groups is that profitability and cash flows have improved during the first quarter. They operate mainly in the core sector of the economy. The profit growth shown by the three groups reflects a revival in the economy.”

For the Reliance group, the major contribution on the net profit front has come from RIL (Rs 1,104 crore), BSES (Rs 85 crore) and IPCL (Rs 39 crore). For the Tata group, the bulk of the contribution has come from a clutch of five companies - Tisco (Rs 267 crore), Telco (Rs 100 crore), Tata Power (Rs 99 crore), VSNL (Rs 66 crore) and Tata Chemicals (Rs 48.5 crore). For the Birla group, it’s essentially from two companies - Hindalco (Rs 193 crore) and Grasim (Rs 130.5 crore), while two others, Indian Aluminium and Indian Rayon, chipped in with net profits of Rs 25.5 crore and Rs 21.6 crore respectively.

On the cash profits front too, broadly the same trends rule. RIL, IPCL and BSES dominate within the Reliance group, while Tisco, Telco, Tata Power, VSNL and Tata Chemicals dominate in the Tata group. Hindalco and Grasim are the main contributors to the A V Birla group’s cash profits.