The landscape of India’s corporate profit rankings is witnessing a notable shift in the wake of the ongoing changes in the global and domestic economy due to the Covid-19 pandemic. In a significant turn of events, the State Bank of India (SBI), a government-owned bank, has outpaced Reliance Industries (RIL) to secure the position of India’s most profitable company in the first quarter of the fiscal year 2023-24.
Historically, Reliance Industries (RIL) has dominated India’s corporate profit charts for more than a decade. However, the 2023-24 April-June quarter saw the emergence of a new leader in the form of SBI.
As the country’s largest lender, SBI reported a consolidated net profit (adjusted for exceptional gains and losses) of Rs 66,860 crore for the trailing 12-month (TTM) period ending in June this year. This achievement propelled SBI ahead of RIL, which recorded a TTM adjusted net profit of Rs 64,758 crore during the same quarter.
Notably, SBI’s quarterly net profit for Q1FY24 stood at Rs 18,537 crore, surpassing RIL’s quarterly net profit of Rs 16,011 crore.
This occurrence holds significant importance as it marks only the second instance in the past two decades that SBI has reported a higher net profit on a TTM basis. Previously, during the July-September quarter of 2011-12 (FY12), SBI had surpassed RIL’s consolidated net profit.
RIL’s position in the profit league table was challenged due to adverse price movements in the global fuel and petrochemicals sector, primarily triggered by the Russia-Ukraine conflict. Consequently, RIL’s consolidated net profit experienced a 10.6 percent year-on-year decline, reaching Rs 16,011 crore in Q1FY24. This marked its weakest performance in eleven quarters.
In contrast, SBI has reported consecutive quarters of record-high earnings. This accomplishment can be attributed to factors such as faster credit growth, a rising spread between interest on loans and interest on deposits, and the successful resolution of past bad loans. As a result, the bank’s net profit witnessed an impressive 153.1 percent year-on-year growth in Q1FY24, largely due to a lower base in the previous financial year (2022-23).
This shift in the corporate profit rankings underscores the dynamic nature of the business landscape and the influence of various macroeconomic factors on the financial performance of India’s leading companies.
