Reliance Industries (RIL) continued to be the largest wealth creator in India for the fifth time in succession, generating Rupees 9.6 trillion during the 2018-23 period.
The top 100 companies created Rupees 70.5 trillion through the five-year period, showed the Wealth Creation Study for 2018-2023 by Motilal Oswal Financial Services (MOFSL).
Lloyds Metals, a relatively low-profile entity, emerged the ‘Fastest Wealth Creator’ at a CAGR of 79%. The study showed that Rupees 10 lakh invested in 2018 in the top 10 fastest wealth creators would worth Rupees 1crore in 2023 — indicating a return of 59% (CAGR) against a 12% return by the Sensex. Two Adani entities featured in the top 10 fastest wealth generators.
Capri Global was the most consistent wealth creator, outperforming the Sensex in all the last five years, showing the highest price CAGR of 50%. ‘Consistent Wealth Creators’ have been defined based on the number of years the stock has outperformed the benchmark in each of the last five years.
PSUs (public sector undertakings) also put up a good showing, with their performance during 2018-23 turning out to be a significant improvement since the last two studies — Seven PSUs accounted for 6% of the wealth created.
Two factors that drove wealth creation by PSUs were the turnaround by two banks (SBI and Bank of Maharashtra), and the growth in the defence sector (Bharat Dynamics, Bharat Electronics, and Hindustan Aeronautics).
The study showed that over 2018-23, wealth creating companies delivered CAGR returns of 22%, compared to 12% by the Sensex. As of March 2023 over March 2018, the Wealthex (wealth creators’ index) was up 166%, whereas the Sensex rose 79% — thus indicating an 87% outperformance over five years. Not only that, the Wealthex clocked FY18-23 earnings CAGR of 20% vs 14% for the Sensex.