Market valuation of large-cap companies have gone up six times more than their profits

Large-cap companies as per Moneylife’s classification reported a 11% growth in net profits for the June quarter but enjoyed a 68% jump in valuation


Companies classified by Moneylife as large-cap (market-cap between Rs2,000 crore and Rs10,000 crore) reported a 9% growth in aggregate sales and a 11% growth in net profit for the quarter ended June 2014 compared to the quarter ended June 2013. As many as 140 companies, of the 241 large-cap companies, reported an increase in net profit.


Interestingly, the market-cap of these 241 companies shot up by a 37% during the quarter. From the end of the June quarter till date, the aggregate market-cap has fallen by -1.67%.

Moneylife tracks a database of 1,294 companies, of which 1,222 companies have declared their results for the June 2014 quarter. Of these 1,222 companies, 241 are large-caps. The aggregate revenues of the large-caps form a share of 16% of the total revenues of the 1,222 companies. The aggregate net-profits of the large-caps form 11.63% of the total net profits.

Among the top performers from the large-cap sample, PTC India, Atul, PI Industries, Kajaria Ceramics and VST Industries have reported an average of 23% growth in sales for the June 2014 quarter, compared to the same period last year. The net profits of these companies have grown by an average of 51%. Companies such as Bhushan Steel, Dish TV India, Fortis Healthcare, Hathway Cable & Datacom and Indian Hotels, reported a profit for the June quarter last year, but have reported a net loss in the latest quarter. These companies have reported a drop in operating profits as well.

As many as 152 large-caps have reported a growth in operating profit and 126 companies have reported a higher operating profit margin. However, the aggregate operating profit margins were marginally lower at 14.51% for the June 2014 quarter, compared to a margin of 14.94% in June 2013. Aggregate net profit margins increased marginally to 5.38% in the quarter ended June 2014 from 5.28% in the quarter ended June 2013.

Valuations of the 241 large-caps measured by market-cap to operating profit (latest quarter annualised) increased by 68.47% to 8.5 times on 18 August 2014 compared to a year ago, when valuations were at five times. The market-cap to net profit increased by 60.85% to 22.9 times from 14.2 times over the same one-year period. Out of the 241 companies as many as 79% or 190 companies are quoting a higher valuation compared to a year ago.


How to appoint a CIC even if there is no Leader of the Opposition

A Committee comprising PM and the Leader of Opposition, recommends CICs names. Since, at present there is no Leader of Opposition, a recently-retired CIC has not been replaced. How to get around it?


There is some discussion about the fact that the replacement for the Chief Information Commissioner who retired last week cannot be appointed since the Leader of Opposition is missing. This is flawed since Section 12 (3) of the RTI Act clearly says :


(3) The Chief Information Commissioner and Information Commissioners shall be appointed by the President on the recommendation of a committee consisting of—

  1. (i) the Prime Minister, who shall be the Chairperson of the committee;
  2. (ii) the Leader of Opposition in the Lok Sabha; and
  3. (iii) a Union Cabinet Minister to be nominated by the Prime Minister.
Explanation.—For the purposes of removal of doubts, it is hereby declared that where the Leader of Opposition in the House of the People has not been recognised as such, the Leader of the single largest group in opposition of the Government in the House of the People shall be deemed to be the Leader of Opposition.
Hence the leader of the single largest group can certainly be chosen and the government should stop dithering on this.
However it may be useful to consider the caliber of Commissioners appointed by this process and question it. The present Commissioners are not delivering and presently they are usually selected as a reward in dispensation of patronage.  The average disposal per Commissioner is less than 2300 annually, though its website states that there is a norm of clearing 3200 cases by each commissioner.  There is a need to set up a transparent rational process for selecting commissioners and getting them to be accountable. We should also demand that atleast 30% of the commissioners should be well recognized RTI activists so that the citizens perspective remains in the commission.  The writer suggests the following process for selection:

1. The Government should advertise openings to appoint Information Commissioners depending on the need atleast six months in advance. Some proper criteria must be developed for this. Eminent individuals could apply or be nominated by others.
2. A pre-selection committee consisting of (possibly) two members of Parliament, Chief Information  Commissioner, one Vice Chancellor, one Supreme Court judge and two RTI activists could be formed to shortlist a panel which could be three times the number of Commissioners to be selected. These could be announced with the minutes of the meeting at which the short listing is done.  
3. An interview should be conducted by the search committee in public view, to give citizens and  media the opportunity to hear the views of the prospective candidates. Citizens could give feedback and views to the pre-selection committee. Subsequently the comittee could present its recommendation for twice the number of Commissioners to be appointed. Based on these  inputs, the final decision to select the Commissioners could be taken by the Committee as per the Act consisting of Prime Minister, Leader of Opposition and one Minister.  (A similar process could be adopted for State Commissions with MLAs instead of MPs and High Court  judge instead of Supreme Court judge).


(Shailesh Gandhi served as Central Information Commissioner under the RTI Act, 2005, during 18 September 2008 to 6 July 2012. He is a graduate in Civil Engineering from IIT-Bombay. Before becoming a full time RTI activist in 2003, he sold his packaging business. In 2008, he was conferred the Nani Palkhivala Memorial Award for civil liberties.)



Capt Edgar Sylva

3 years ago

Why not Shailesh Gandhi as CIC- he was a IC who was approved by all parties so where is the problem.


3 years ago

It is incorrect to say that a Committee comprising PM and the Leader of Opposition, recommends CICs names.

As per Sc. 12(3) of RTI act 2005 the members of the recommending committee are PM, Leader of opposition and a Union Cabinet minister to be nominated by PM.

It is also incorrect to say that the replacement for the Chief Information Commissioner (CIC), who retired last week cannot be appointed since the Leader of Opposition (LoP) is missing. RTI Act by way of explanation to above section clarifies that for the purposes of removal of doubts, it is hereby declared that where the Leader of Opposition in the House of the People has not been recognised as such, the Leader of the single largest group in opposition of the Government in the House of the People shall be deemed to be the Leader of Opposition. So in so far as appointment of CIC/ICs is concerned there is no difficulty .


shailesh gandhi

In Reply to VijayTrimbakGokhale 3 years ago

I have made an error in my piece and am grateful to Mr. Vijay Trimbak Gokhale for giving the correct position. I apologise for my error


3 years ago

The opposition leader should be a leader from the combined opposition and not of a leader of the single largest party.

Open letter to Health Minister Harsh Vardhan

Medical ethics in this country is non-existent. Corruption is rampant and the MCI, which is meant to control unhealthy practices closes its eyes to this menace. And Dr Harsh Vardhan, the union minister for health & family welfare seems has shown the rare honesty to admit it


“Fraud and falsehood only dread examination. Truth invites it.” -Samuel Johnson

Dear Dr Harsh Vardhan,

I was thrilled to read your measured opinion on our institutions that are supposed to be the guardians of medical education and research. No minister in the past had the honesty to admit that both the Medical Council of India (MCI) and the drug regulatory authority are not just corrupt but are “dens of corruption and snake pits full of poisonous snakes”. These statements can come only from an authentic human being like you.


Honest and humane doctor that you are, you have understood the situation correctly and had the courage to call a spade spade. May God be with you to clean up their stables with help from PM Narendra Modi. Someday this had to happen and the sooner it does the better for the poor patients and students.

Corrupt Bodies

There is no point in blaming individuals. Anyone else in that position would do the same thing with the corrupt system that is in place. Corruption can never be one sided. Unless there are dishonest people wanting to get illegal things done by these licensing bodies as I might like to call them there will be their match in these bodies. I remember the time when Dr CP Thakur wanted to clean up the system and had asked me to get into MCI up. I pleaded with him that one man cannot do anything. The people in charge moved heaven and earth to see that I did not get in there. Little did they realise that I had declined the offer in the first place! You might fault me for running away from the responsibility and for not standing up to their might. In our so called democratic set up it is the numbers that count. Once, a God's good man, who was the Vice Chairman, contested against the mighty forces and poor man got probably only his vote; 99% voted against him.

Even the Supreme Court failed in their effort. They appointed an army General but nothing happened and in the end as the vested interests won. What we need are very effective new laws that govern these watchdog bodies. Dental Council of India (DCI) and All India Council for Technical Education (AICTE) are no exceptions. In fact, they are competing with one another to see who gets the first rank in dubious practices. But the problem will be to get honest authentic men and women to man these bodies.

The present law makes corruption easy with half the number of members being political appointees from States and the rest medical politicians whose only aim is to get into these bodies to “control" them for money and power. They have very little idea about medical education or even research.  I think as a stop gap arrangement, the government could call for applicants for the job with minimum qualification and their details should be in public domain for at least six months before they are selected to be in these bodies. In the meantime, well-meaning citizens would put forward their opinions about the candidates.


May be many a time adverse comments are posted to prevent good people from getting selected. Anyone who posts an adverse comment should be able to prove the allegation with solid proof. The system might look cumbersome but we have no choice.

Inspector Raj

The next abetters of corruption in this game are the inspectors who go round from college to college to assess them. Now they are selected by the powerful people at random, mostly their own chelas who will do their bid for a price! This should end. One could prepare a country wide list of honest teachers to be inspectors and again their details must be available for public scrutiny following the same guidelines as above. This group of 100-150 all India inspectors must be a reserve force. As and when the need arises, the needed number could be drawn only from that list. This will avoid bad elements again. I am sure this country has many, many honest and good hearted teachers, who cannot be corrupted easily.

In addition, there should be a small group of censors who periodically counter check the inspection details at random. The inspections should not be intimated in advance to the colleges. It must be only surprise inspection and the expenses must be borne by the institutions concerned even the government ones. The inspectors should not take any hospitality, even transport from the colleges. The Councils should bear all that. To compensate for that, hefty fees could be levied on the institutions. They make tons of money anyway. It is common knowledge that anywhere between Rs2-Rs4 crore changes hands for a single post-graduate (PG) seats under the table but the powers that be pretend not to know that. How long can this go on and at what cost to the future generation of doctors? If they start their lives with corruption they will naturally be inhuman doctors out to make up for the huge loss to their parents.

Corruption in ‘Research’

Research organisations are another story. They are also hot beds of corruption. Each one is trying to pat the other on the back for grant disbursement and other favours. Most of them probably do not see the relevance of need based research for our country. Most research is repetitive and many times copycat studies are done wasting the precious tax payers' money with no advantage to the common man.

We need refutative research to demolish many myths in Medical field. Our thrust must be to find inexpensive methods of treatment and not copy the top heavy industry friendly western research. Research should be able to prioritise our needs-the main areas being malnutrition, infant and maternal mortality prevention, communicable diseases still leading the death list, and adverse drug reactions- a curse from the western medical research followed blindly.

While it has been the mother of most alternate systems of medicine with Ayurveda in the forefront, our main line researchers still have a holier than thou  attitude towards that and we still do not have strong research base for alternate medicines in the country although AYUSH is apparently trying to do something.

In the area of research, we should have men and women who have the ability to unlearn what they have learnt and relearn again the right methods. Even the framers of the American Constitution had said that there should be “right to health and medical treatment” lest at a future date one system should monopolise the area at the cost of other systems. That idea did not find favours even then. The result today is for all to see.

In the West, of course, followed by us the servants of the western thoughts, western medicine has taken as strong root here in India. Many of our leaders in the field of medicine and of course, politics, think with their western or western style education that all other systems are not "scientific" and have been able to convince our masses, especially the literate ones. This has been our biggest curse.

Most illnesses, barring those needing emergency treatments, could very well be managed by some of the alternate systems of medicine in vogue. Most all of them could be validated using the western standards before being let loose on the people if desired. In fact, Dr Shiv Ayyadurai, an ethnic Indian researcher at MIT, Boston has shown that Ayurveda and Sidha systems of India have a better science base compared to western reductionist medical science!This alone will bring down our sickness care costs to manageable limits.

Medical ethics in this country is non-existent. Corruption is rampant in medical practice and the MCI, which is primary meant to control unhealthy practice in the country closes its eyes to this menace. Practising doctors do not have any periodic ability assessment, neither is there a proper continued professional development activity for them. All these, and more, need to be looked into in detail, Mr Minister. I cannot put more details here but am ready to give further inputs should the need arise. Let us usher in a new era in medical education, research, and medical practice under your able guidance. The country will remember you for eons if you do that. Go ahead, the country is with you.

Good luck.

“Fraud is the daughter of greed.” - Jonathan Gash,

(Professor Dr BM Hegde, a Padma Bhushan awardee in 2010, is an MD, PhD, FRCP (London, Edinburgh, Glasgow & Dublin), FACC and FAMS. He is also Editor-in-Chief of the Journal of the Science of Healing Outcomes, chairman of the State Health Society's Expert Committee, Govt of Bihar, Patna. He is former Vice Chancellor of Manipal University at Mangalore and former professor for Cardiology of the Middlesex Hospital Medical School, University of London.)



kapil bajaj

3 years ago

Dear Dr. Hegde, your letter talks about minister's criticism of the existing institutions - but exhibits complete ignorance of the 'shadow government' that has emerged.

One such 'shadow government' institution that has emerged is PHFI (Public Health Foundation of India) which has been gradually supplanting the ministry of health and family welfare in many areas of health policy and practice.

Controlled by the Gates Foundation and Big Business, PHFI represents one of the biggest frauds in India's history in terms of wholesale capture of public policy and resources.

Far from proceeding against this massive fraud, Harshvardhan seems to have been encouraging PHFI, which I've dubbed 'Public Health Fraud of India'.

The minister's criticism of public institutions should be seen in this light. Maybe he is preparing the ground for replacing those public institutions with more fraudulent institutions like PHFI.

Read more about 'Public Health Fraud of India' on the following link.


3 years ago

As my 64 years expiriance concern i am observing indian politics from 1967 after break-up of congress in-to indira congress and sanstha congress (morarji's)morality going down and down. all leaders born after indipendance are comminig for money and power there is not a singal "SEWAK" IN INDIAN POLITICS ALL ARE RULLER'S AND AWAY FROM LOW LOW CAN'T DO ANY THING'S TO POWERFULL PEOPLE SO ALL TAINTED ARE COMMING IN POLITICS .... JAI HIND NAHI BUT BHARAT MATA KI JAY

Narendra Doshi

3 years ago

Dear Prof B M Hegde,
Excellent letter with contents which are very dear to your heart and had to lie low for several years or decades, probably.
Dr. Harsh Vardhan & PM ..Na Mo.. should start implementing some ideas, immediately and seriously.

Pradeep R Hattangadi

3 years ago

Dr Hegde has mentioned about DCI and AICTE even the Bar Council is corrupt.

Madhur Aggarwal

3 years ago

What a letter .
Dr BM hegde Salud !!!


3 years ago

Why cant we have standard charges for everything? Let us lay down the minimum requirements for hospital rooms of various categories all over the country and fix standard charges for them in all hospitals so that we know what is delux in one hospital and super delux in another. Mediclaim reimbursement will also be simple. Why charge differnet charges like admission and service charges in hospitals which not reimbursed by mediclaim? Similarly fix charges for all different class of doctors such as surgeons, MDs etc for OPD patients and hospital room visits. Most important why not make compulsory subscription of medicines by generic names?

Vaibhav Dhoka

3 years ago

Incoming of corporate in field of Medicine is the root cause of corruption.Since their entry about 15 years back this menace has increased.These hospitals appointed representative in marketing so private doctors had no choice but to trail route set.And then by and large most are greedy.So the rot.

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