During the first quarter (Q1) of the ongoing fiscal year 2023-24, the State Bank of India (SBI) achieved a net profit of ₹18,736 crore, surpassing Reliance Industries Limited (RIL), which recorded a net profit of ₹18,258 crore.
SBI secured this prominent position, outperforming Mukesh Ambani’s Reliance Limited (RIL), according to data from Capitaline Databases, a comprehensive digital repository encompassing 35,000 listed and unlisted companies in India.
The Q1 FY24 rankings of the most profitable companies are as follows:
- State Bank of India: ₹18,736 crore
- Reliance Industries Limited: ₹18,258 crore
- Indian Oil Corporation Limited: ₹14,735 crore
- HDFC Bank: ₹12,403 crore
- Tata Consultancy Services: ₹11,120 crore
- ICICI Bank: ₹11,015 crore
- Bharat Petroleum Corporation Limited: ₹10,644 crore
- Adani Power: ₹8,759 crore
- Coal India: ₹7,941 crore
- Hindustan Petroleum Corporation Limited: ₹6,766 crore
SBI, a notable public sector institution and the 48th largest global bank by total assets, stands as India’s largest bank with a substantial 23% market share in assets and a significant share in the loan and deposits market.
With its headquarters situated in Mumbai, SBI boasts a workforce of nearly 250,000 individuals, positioning itself as the fifth-largest employer in the country.
The dynamics of the domestic and global economies have been reshaping the corporate profit landscape in India following the onset of the Covid-19 pandemic.
SBI reported a consolidated net profit of ₹66,860 crore for the trailing 12 months (TTM) ending in June, outperforming RIL’s TTM adjusted net profit of ₹64,758 crore for the same quarter.
SBI’s Q1FY24 net profit of ₹18,537 crore also surpassed RIL’s Q1 net profit of ₹16,011 crore.
Remarkably, this marks only the second instance in the past two decades where SBI has reported a higher TTM net profit than RIL. The previous occurrence was during the July-September quarter of the 2011-12 fiscal year.
Historically, RIL has vied for the position of the country’s most profitable company with public sector oil and gas giants like Oil and Natural Gas Corporation (ONGC) and Indian Oil Corporation (IndianOil).
RIL’s decline in the profit rankings stems from significant challenges in its oil-to-chemicals business due to adverse price movements in global fuel and petrochemical markets following the Russia-Ukraine conflict.
Consequently, RIL’s consolidated net profit dropped by 10.6% YoY to ₹16,011 crore in Q1FY24, marking its weakest performance in 11 quarters.
In contrast, SBI experienced a remarkable turnaround, achieving a 153.1% YoY increase in net profit in Q1FY24, attributed to factors like accelerated credit growth, favourable interest rate spreads, and the resolution of previous non-performing assets.
This resurgence of SBI’s net profit is emblematic of the growing influence of the banking, financial services, insurance (BFSI), and stockbroking sectors in the Indian economy and the corporate landscape.
Companies within the BFSI sector now contribute nearly 35% of corporate profits, a substantial rise from around 10% before the pandemic. In contrast, there has been a relative decline in the industrial and manufacturing sectors, leading to sluggish revenue and profit growth.
RIL’s consolidated earnings have seen significant contributions from newer non-industrial ventures such as retail and telecommunication services, although these segments are less profitable compared to its traditional industrial operations.
Despite growth in its new ventures, RIL’s consolidated net profit in Q1FY24 closely resembled its earnings in the October-December quarter of 2020-21.
Related posts:
