The curious case of companies that have high valuations with low earnings | News Bharat

  • The Burgundy Private Hurun India 2022 list includes 61 companies with sales below ₹1,000 crore in FY22.
  • The company with the biggest discrepancy between its value and revenue is GlobalBees, a startup that helps brands scale and sell their products in different markets.
  • The list also includes unicorns like CRED, Spinny, as well as two Adani Group companies.

While most of the valued companies according to the Burgundy Private Hurun India list generate thousands of crores of revenue, commanding a valuation in the range of 2-10x of their FY22 earnings, there are some companies like GlobalBees that command a 253x valuation multiple to their earnings.

According to Hurun’s list, the top ten companies with the biggest discrepancy in their valuation and earnings include two Adani Group companies, excluding unicorns like CRED, Spinny and others.

“Curiously, some of India’s most valuable companies had surprisingly low sales. 61 of the 2022 Burgundy Private Hurun India 500 companies had sales of less than ₹1,000 crore in FY 2022. Adani Total Gas, for example, has revenues of “only” ₹3,248 crore and only 570 employees, but despite this has a market capitalization of ₹ 3,96,245 crore while unicorn Physics Wallah was valued at ₹ 9,100 crore despite generating less than ₹ 233 crore in sales in FY22,” said Anas Rahman Junaid, MD and Principal Investigator , Hurun India.

For example, GlobalBees, the company with the biggest discrepancy in value and revenue, is a startup that focuses on supporting brands and helping them improve their sales. Another on the list is Bajaj Holdings is an investment company of the Bajaj Group that identifies new investment opportunities.

“Value is perhaps the best way to measure a company’s performance because value takes into account not only the company’s current performance, but also its future potential. If a business is valued at $30 billion, for example, that means investors believe it will generate $30 billion in profits within ten years,” Junaid added.

Another company with a big difference in value and revenue is CRED, a fintech company that operates a rewards-based credit card payment app. New-age startup Spinny, which provides an online platform for used car buyers, is also on the list.

Rank Company Value to earnings ratio Value (₹ cr) Revenue (₹ cr)
1 GlobalBees 253 9,100 36
2 Bajaj Holdings 152 74,128 487
3 Apna 138 9,100 66
4 CRED 137 53,800 393
5 IDFC 126 12,364 98
6 Adani Total Gas 122 3,96,245 3,248
7 turning 81 14,500 180
8 Turtle 76 7,500 99
9 Groww 67 24,800 369
10 Adani Green Energy 60 3,33,106 5,548
11 Physics Wallah* 39 9,100 233

Source: Hurun Research Institute, 2022 Burgundy Private Hurun India 500, BSE

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The patient capital

While two Adani Group companies figure in the list of the top ten companies with the biggest mismatch between their value and earnings, the group is focused on raising fresh funds.

Earlier in November, the group’s flagship company, Adani Enterprises, announced plans to raise ₹20,000 crore through an additional public offering (FPO).

“We made strategic capital. The next capital is patient capital. Indian mom and pop investors are investing for their children and grandchildren,” the company’s chief financial officer Jugeshinder Singh said in an interview with Bloomberg.


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