Motilal Oswal Securities Ltd (MOSL) is one of the fastest growing equity research and broking houses in India. It was started in 1987 as a small sub-broking unit and provides many financial services like Wealth Management, Broking & Distribution, Commodity Broking, Portfolio Management Services, Institutional Equities, Private Equity, Investment Banking Services and Principal Strategies.
Wealth Creation Study is an annual study conducted by the company to identify the fastest, biggest and most consistent wealth creators. It analyzes top 100 companies based on their performance and profits. The companies are assessed on four parameters – focus on core business, financial performance, quality of management, and speed of wealth creation – over a period of five years.
It means the amount of profit or equity that a company generates over and above the capital invested by the company and its shareholders. It also helps investors, shareholders and companies come up with new and innovative business strategies to make better profits and improve their business.
The company has been conducting this study every year since 1991 and the next Wealth Creation Studies and Awards is scheduled to be held this year on 17th December. Only those companies which have made an annual growth of at least 25% are taken into account. Then these companies compete against each other to show who has got the fastest, biggest and most consistent growth. How the company has performed in the past 5 years is taken into consideration and a winner for each of the three categories is announced.
Awards and winners over the years:
In 2006, the award for the fastest wealth creator went to Matrix Laboratories after registering a growth of 183%, followed by Kirloskar Brothers (170.0%), Pantaloon Retail (169.9%), Aban Offshore (169.0%) and Natl. Minerals (154.6%).
ONGC, which created 1678 bn Rs, was awarded as the biggest enhancer of capital and was followed by Reliance Industries and Indian Oil which generated 1078 Bn Rs and 555 Bn Rs respectively. The other two in the top 5 biggest wealth creators were Infosys Technology and ITC.
Pharmaceuticals giant Ranbaxy recorded the most consistent growth in 2006. Wipro, Dr Reddy’s Laboratories, CIPLA and HDFC followed it up with excellent consistency.
Corporate earnings grew by 58% during 2001-2003 and industries like sugar, textiles and engineering saw excellent growth. The study also found that domestic companies were growing by leaps and bounds, commodity businesses were quite popular and most of the wealth creators were the leaders in their field or business area.
2007 saw the biggest companies compete against each other to bag the awards for the 3 categories. BF Utilities was given the award for the fastest wealth creator based on its performance of an adjusted price CAGR of 267% and an appreciation of 665 times. Wipro Ltd, which had previously won 5 awards for wealth creation in the past, got the award for being the most consistent wealth creator for the first time in 2007 with a 15-year price CAGR of 47%. Reliance Industries got the award for the biggest wealth creator by adding Rs. 1,856 billion to investor wealth at an adjusted price appreciation of 7.7 times.
2008, apart from announcing the winners, also observed that Rs 25.4 lakh crores was generated by the top 100 companies assessed, which was by far the highest in the last 13 studies. Reliance Industries generated Rs 3.1 lakh crores and became the biggest wealth creator. Unitech, with a 5-year price CAGR of 284%, emerged as the fastest wealth enhancer. Infosys, the IT giant, was recognized as having the most consistent growth.
This year also saw many commodity companies find place in the top 10, indicating their rapid growth. Many tips for investment were also identified like catching the companies young, anticipating growth and changes and then investing. Telecom and insurance companies were expected to do well in the coming years.
Motilal Oswal Securities Ltd. offers various financial services. Look out for Motilal Oswal Wealth Creation Study which is to be conducted on 17th December, 2009.
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