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The big guys are still the ones racing ahead

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The 25 fastest-growing companies in the latest edition of ET500 have moved up more than 100 points in ranks. The top 50 companies have moved up more than 80 points in terms of rank. That is keeping in tune with the rapid growth in sales and profits, and market cap of companies.

The scenario may look a little different now, because these rankings were done before the markets fell. Still, corporate performance plays a key role in the rankings and there is nothing to suggest a slowdown on that front. The company that gained the most in ranks, went up by 213 steps to reach the 241st position. To know which company this is, you will have to wait till Wednesday.

There are other unique elements about the 25 fastest growing ET500 companies. For instance, industries are not concentrated. There are companies from virtually all sectors, signifying the broad sweep of the current economic growth phase. Pharma, steel, cement, IT, chemicals, capital goods, textiles, and others - companies from almost all sectors figure in the fastest growing companies.

In terms of size, most of the fastest growing companies in the latest ET500 issue are mid-to-large-sized companies. This is on the basis of market capitalisation and/or sales. Among the 25 fastest growing companies in terms of ET500 ranks, the smallest company is Anant Raj Industries, belonging to the granite and ceramic industry, with sales of Rs 85 crore. The largest is JSW Steel with a turnover of Rs 6,900 crore.

The fastest growing companies also have respectable levels of market capitalisation. KS Oils is the smallest, but has a market cap of about Rs 450 crore. The company with the highest market capitalisation is around Rs 15,500 crore. That distinction goes to Ranbaxy Laboratories from the pharmaceutical industry.

Just to give you a comparison - the lowest market capitalisation in ET500 is around Rs 150 crore. Thus, the fastest growing companies typically are bigger in size too. Many have come out with IPOs in recent years: About half have been listed in the past few years. Some of the companies of older vintage are Ranbaxy, Moser Baer, NIIT, Sterlite Optical, and IFCI.

What makes these companies the fastest growing in ranks in ET500? Much has to perhaps do with the developments in these companies and/or the industry per se. Even when market valuations are shooting through the roof, some companies have marched ahead of others on account of news flows, acquisitions.

Other fast-moving companies have benefited from beneficial industry cycles. Examples are steel, cement, capital goods and construction. For instance, market capitalisation of cement makers more than doubled against 37% growth recorded by all 500 stocks. Similarly, net profit of cement companies jumped by 143% year-on-year and their net sales went-up by 78% y-o-y. The figures for the entire universe of 500 stocks were 29% and 25%, respectively.