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Top 10 Exporters in FY02 - Views on News from Equitymaster
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  • May 9, 2003

    Top 10 Exporters in FY02

    With the opening up of the Indian economy in the early 1990's, not only did foreign majors start to look at India as a key consumer, but it also opened the world to India Inc. The government, on its part, provided subsidies so as to incentivise manufacturers to sell more in the international markets, but not without a cause. Exports meant companies would earn in foreign currencies, which would in turn help the government in increasing its foreign exchange reserves. We take a look at some of the top exporters in the country (only listed companies) and the trend in the last decade.

    (Rs m) Mar-94 Mar-02 % net sales*
    Reliance Industries 2,215 99,659 19%
    Infosys Technologies 249 24,955 96%
    Wipro 138 23,495 69%
    Indian Oil Corporation 2,438 20,788 2%
    Hindustan Lever 1,576 17,741 16%
    Satyam Computer Services 75 16,016 93%
    National Aluminium 10,619 12,354 54%
    Larsen & Toubro 249 11,516 15%
    Ranbaxy Laboratories 4,410 10,855 48%
    Bharat Heavy Electricals 2,546 9,895 14%
    Total of the above 24,516 247,273 13%
    India's exports 826,740 1,544,450  
    % of India's exports 3% 16%  

    *pertains to March 2002

    As per our study in FY02, though Reliance was the top exporter in the country (among listed companies), it was the software companies that especially drew our attention. The big 3 of software (again listed companies), i.e. Infosys, Wipro and Satyam, scored in terms of maximum contribution of exports to revenues. For all 3, exports as a % of revenues stood way above the others. This is not surprising considering the fact that Indian tech companies have emerged as one of the most cost competitive service providers in the world. Currently, the top rung Indian tech majors are servicing the Fortune 500s of the world. This is vindicated by the fact that India accounts for 2% of global software services spending in FY03 as compared to a miniscule share a decade ago. At present in FY03 the Indian software exports are pegged around Rs 475 bn, a 30% growth over the previous year.

    Another significant contributor to the forex earnings of the country has been Ranbaxy Laboratories. Ranbaxy sells its products in over 70 countries and has manufacturing units in 7 countries. As a result of which around 58% of its revenues in FY03 come from exports, mainly in the US and European markets. On a CAGR basis, exports have grown at 12% (FY94-FY02). The probable reason for the company to leverage on the international markets is because it saw the opportunity of generics in the western markets and set up a sizeable presence across countries well in advance. That anticipation is now paying off for the company. Apart from Ranbaxy, Dr. Reddy's is the other domestic pharma company which has significant exports and makes its way in the top 20. In FY02, 61% of its revenues came through exports, while in FY94 it was a mere 2%.

    Company Name CAGR net sales** CAGR exports**
    Satyam Computer Services 97% 95%
    Wipro 39% 90%
    Infosys Technologies 75% 78%
    Larsen & Toubro 15% 61%
    Reliance Industries 37% 61%
    Hindustan Lever 23% 35%
    Indian Oil Corporation 20% 31%
    Bharat Heavy Electricals 9% 18%
    Ranbaxy Laboratories 17% 12%
    National Aluminium 8% 2%
    Total of the above 22% 33%

    **growth over March 1994

    Apart from manufacturing companies like National Aluminium, Larsen & Toubro and BHEL which are among the top foreign currency earners for the country, Indian Oil is also among this top 10 list. Although India has traditionally been an importer of oil and petroleum products, Indian Oil has been exporting petroluem products like diesel and Jet Fuel to Sri Lanka and Bangladesh as it has excess capacity in India. However, the export contribution to net sales in FY02 was only 2% and over FY94 it has grown only 1%. Reliance exports polymer products like Polypropylene woven fabrics and related products to the US and European markets and its exports have been growing at a CAGR of 61% (FY94-FY02).

    Looking at the export statistics, it becomes clear that only the company's with innovation and vision have succeeded in exploiting the export potential. Both pharma and software have been the key achievers of this decade. One is now slowly seeing indian auto ancillary and engineering companies too making a mark on the global scene. Some big MNCs have made their Indian arms global sourcing bases. However, India's contribution to the international trade is just 0.6% and is expected to reach only 1% by 2007. Developed countries have traditionally been a target for Indian exports, but with the economic slowdown in the developed countries, India should look for emerging economies like China for potential growth. The government has also taken initiatives to give a fillip to the export oriented companies, but India Inc. still has a long way to go.



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