{"id":11230,"date":"2023-08-22T19:51:30","date_gmt":"2023-08-22T14:21:30","guid":{"rendered":"https:\/\/gtm360.com\/blog\/?p=11230"},"modified":"2024-08-19T21:28:17","modified_gmt":"2024-08-19T15:58:17","slug":"fortune-global-500-surges-ahead-of-indian-it-industry","status":"publish","type":"post","link":"https:\/\/gtm360.com\/blog\/2023\/08\/22\/fortune-global-500-surges-ahead-of-indian-it-industry\/","title":{"rendered":"Fortune Global 500 Surges Ahead Of Indian IT Industry"},"content":{"rendered":"<p><strong><a href=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/fg500-2023-cover-300w.jpg\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-11234\" src=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/fg500-2023-cover-300w.jpg\" alt=\"\" width=\"149\" height=\"200\" \/><\/a><\/strong>No Indian IT company has made it to the latest <strong>FORTUNE GLOBAL 500<\/strong>. This is despite the industry leader <strong>TCS<\/strong> growing faster than the list&#8217;s hurdle revenue. I&#8217;m guessing that the gap between the two last year was too wide to be bridged in one year.<\/p>\n<p>Before we do a deep dive into the industry, here&#8217;s a quick snapshot of the <em>Fortune Global 500<\/em>.<\/p>\n<p><strong>FORTUNE GLOBAL 500 &#8211; 2023<\/strong><\/p>\n<p>The 500 largest corporations in the world collectively generated $41 trillion in revenues. This is one-third of the global GDP.<\/p>\n<p><strong>Walmart<\/strong> continues to be the largest company in the world for the 10th year in a row. But <strong>Saudi Aramco<\/strong> is closing in very rapidly. By this time, next year, we might see an upset in the #1 spot.<\/p>\n<p>The 500th company on the list is a newcomer from China: <strong>Xinjiang Guanghui Industry Investment<\/strong>. Can&#8217;t say I&#8217;ve heard of this company before.<\/p>\n<p>The following exhibit shows the contours of Fortune Global 500.<\/p>\n<p><a href=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/fg500-2023-contours.jpg\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-11232 size-full\" src=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/fg500-2023-contours.jpg\" alt=\"\" width=\"500\" height=\"126\" \/><\/a><\/p>\n<p>With profit of 159 billion dollars, Saudi Aramco achieves the distinction of being <em>most profitable company in the 28 year history of Fortune Global 500<\/em>.<\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">&quot;Saudi Aramco is the most profitable company in the history of the world: $159B net income on $604B revenue, which is also the most profitable year ever for a FORTUNE Global 500 company. It narrowly missed #1 spot on the list to WalMart (revenue $611B)&quot; ~ <a href=\"https:\/\/twitter.com\/ajs?ref_src=twsrc%5Etfw\">@ajs<\/a> <a href=\"https:\/\/twitter.com\/FortuneMagazine?ref_src=twsrc%5Etfw\">@FortuneMagazine<\/a><\/p>\n<p>&mdash; Ketharaman Swaminathan (@s_ketharaman) <a href=\"https:\/\/twitter.com\/s_ketharaman\/status\/1688814802221555717?ref_src=twsrc%5Etfw\">August 8, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>Greater China (which includes Mainland China &#8211; People&#8217;s Republic of China, Taiwan &#8211; Republic of China and Hong Kong) continues to have the highest number of entries on the list (142). However, in a shift from last year, the aggregate revenues of Global 500 companies in USA ($13 trillion) has overtaken that of Greater China.<\/p>\n<p>23 companies made their debut on the Fortune Global 500, including Daimler Truck (No. 264), Amperex (No. 292), and Uber Technologies (No. 477).<\/p>\n<p>There are 118 government-owned Fortune Global 500 companies on the list, with more than two-thirds based in China.<\/p>\n<p>The long-term slide of Japan was especially clear this year. As Claire Zillman \/ Alyson Shontell notes in <strong>THE READER<\/strong> newsletter dated 19 August 2023:<!----------START----------><!--BLOCKQUOTE, NO LHS LINE, GRAY--><\/p>\n<blockquote class=\"skr-bq-noline\">\n<div style=\"background-color: #fafafa; padding: 15px 30px;\">When <em>Fortune<\/em> released its first modern-day Global 500 in 1995&#8230; Japan had 149 companies on the list, which collectively generated 37% of Global 500&#8217;s total revenue. Fast-forward 28 years, and Japan&#8217;s presence on the list has dwindled to 41 firms that account for 7% of all revenue.<\/div>\n<\/blockquote>\n<p><!----------END----------><\/p>\n<p>India has eight Fortune Global 500 companies.<\/p>\n<figure id=\"attachment_11235\" aria-describedby=\"caption-attachment-11235\" style=\"width: 490px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/fg500-2023-india-2.jpg\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-11235\" src=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/fg500-2023-india-2.jpg\" alt=\"\" width=\"500\" height=\"220\" srcset=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/fg500-2023-india-2.jpg 1149w, https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/fg500-2023-india-2-500x220.jpg 500w, https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/fg500-2023-india-2-1024x451.jpg 1024w, https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/fg500-2023-india-2-768x338.jpg 768w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-11235\" class=\"wp-caption-text\">CLICK TO EXPAND<\/figcaption><\/figure>\n<p>As in the last couple of years, <strong>Reliance Industries<\/strong> is the largest and <strong>Rajesh Exports<\/strong> is the smallest Indian company on the list.<\/p>\n<p><strong>FORTUNE GLOBAL 500 QUALIFYING REVENUE<\/strong><\/p>\n<p>The <strong><em>Fortune Global 500 Qualifying Revenue<\/em><\/strong> rose by 7.93% to USD 30.922 billion.<\/p>\n<p><a href=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/fg500-qr-5Y-2023.jpg\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-11236 size-full\" src=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/fg500-qr-5Y-2023.jpg\" alt=\"\" width=\"500\" height=\"225\" \/><\/a><\/p>\n<p>For the uninitiated, <em>Fortune Global 500 Qualifying Revenue<\/em> is the revenue hurdle that a company must cross to enter the hallowed corridors of the 500 largest corporations in the world. In other words, it\u2019s the revenue of the company ranked 500th on the list. FG500-QR has grown YoY every year in the last decade except in the lists published in 2016 and 2021.<\/p>\n<p><strong>INDIAN IT INDUSTRY<\/strong><\/p>\n<p>As in the past few years,<strong> TCS<\/strong>, <strong>Infosys<\/strong>, <strong>HCL<\/strong> and <strong>Wipro<\/strong> continue to occupy the top four spots by revenues in the Indian IT industry. The following exhibit shows their revenues for FYE2023 and FYE2022.<\/p>\n<p><a href=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/revenues-last-2-years-indian-it-2023.jpg\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-11238\" src=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/revenues-last-2-years-indian-it-2023.jpg\" alt=\"\" width=\"499\" height=\"93\" srcset=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/revenues-last-2-years-indian-it-2023.jpg 713w, https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/revenues-last-2-years-indian-it-2023-500x93.jpg 500w\" sizes=\"auto, (max-width: 499px) 100vw, 499px\" \/><\/a><\/p>\n<p>Unlike the past, I was able to find the revenues of these companies on a single chart in <em>Economic Times<\/em>.<\/p>\n<p><a href=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/revenues-profits-fy23-ET-07may2023-500w.jpg\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-11237 size-full\" src=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/revenues-profits-fy23-ET-07may2023-500w.jpg\" alt=\"\" width=\"500\" height=\"391\" \/><\/a><\/p>\n<p>These figures match the ones in the statutory reports filed by these companies to stock exchanges in India and USA.<\/p>\n<p>With revenue of $27.93B, TCS is <strong>9.68%<\/strong> behind the Fortune Global 500 Qualifying Revenue of $30.922B. The gap last year was 10.27%. While the gap has narrowed since TCS&#8217;s sales grew faster than FG500-QR this year, it has still not been bridged.<\/p>\n<p>By extrapolating the current CAGRs of these four companies, I\u2019ve forecasted their revenues for the next 10 years. I\u2019ve then juxtaposed their revenue trajectories with the projected FG500 Qualifying Revenues for the same period. The following chart is the result:<\/p>\n<p><a href=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/fg500-2023-fi.jpg\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-11231 size-full\" src=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/fg500-2023-fi.jpg\" alt=\"\" width=\"630\" height=\"280\" srcset=\"https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/fg500-2023-fi.jpg 630w, https:\/\/gtm360.com\/blog\/wp-content\/uploads\/2023\/08\/fg500-2023-fi-500x222.jpg 500w\" sizes=\"auto, (max-width: 630px) 100vw, 630px\" \/><\/a><\/p>\n<p>Click\u00a0<a href=\"https:\/\/www.sketharaman.com\/Research_&amp;_Intellectual_Property.htm#raip40\" target=\"_blank\" rel=\"noopener\"><strong>here<\/strong><\/a>\u00a0to download this model as an Excel Workbook (XLSX, 23KB).<\/p>\n<p>Here are the highlights of the forecast:<\/p>\n<ol>\n<li>Going by the present forecasting parameters, none of the four Indian IT companies in the model will organically become a Fortune Global 500 company during the entire model\u2019s tenure through to 2033. I&#8217;m sad at having to arrive at this conclusion for the second year in a row.<\/li>\n<li>For academic interest, the earliest any company would make it to Fortune Global 500 organically is 2039, when TCS ($105.29B) will overtake FG500 Qualifying Revenue ($104.91B).<\/li>\n<li>This can change if the Big 4 Indian IT companies engage in M&amp;A. I&#8217;m tired of saying this because, despite eternal exhortations from industry experts, Indian IT companies haven&#8217;t done any game-changing M&amp;As so far.<\/li>\n<li>There was some big ticket M&amp;A buzz from Wipro around six months ago but nothing seems to have come out of it so far. Also, given that the company recently returned cash to shareholders via share buyback program, it seems unlikely that it&#8217;s pursuing any major M&amp;A deal in the short term.<\/li>\n<\/ol>\n<p>Before closing, it&#8217;s heartening to note that the top Indian IT companies have acquired an impressive roster of pilot (200+) and production (100+) projects for <strong><em>Generative AI<\/em><\/strong>, currently the hottest technology in the world. According to <strong><em><a href=\"https:\/\/twitter.com\/s_ketharaman\/status\/1684563050668630018\" target=\"_blank\" rel=\"noopener\">The Register<\/a><\/em><\/strong>, use cases include content creation, customer service and predictive analytics.<\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">Indian IT Services industry leaders TCS Infosys HCL Wipro et al are delivering 100+ projects and another 200+ pilots in AI. <a href=\"https:\/\/t.co\/3cYKEm0kR8\">https:\/\/t.co\/3cYKEm0kR8<\/a> via <a href=\"https:\/\/twitter.com\/TheRegister?ref_src=twsrc%5Etfw\">@TheRegister<\/a>  .<br \/>Use Cases: <br \/>&#8211; Content creation<br \/>&#8211; Customer service<br \/>&#8211; Predict container price 3 months down the line<br \/>etc.<\/p>\n<p>&mdash; Ketharaman Swaminathan (@s_ketharaman) <a href=\"https:\/\/twitter.com\/s_ketharaman\/status\/1684563050668630018?ref_src=twsrc%5Etfw\">July 27, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>This throws cold water on naysayers&#8217; repeated predictions that the Indian IT industry would get killed by cutting-edge technologies. The industry has not only weathered <em>Y2K<\/em>, <em>Internet<\/em>, <em>Web 2.0<\/em>, <em>Mobility<\/em>, <em>Cloud<\/em>, <em>AI<\/em>, and other disruptive technology waves but has emerged stronger from each one of them.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>No Indian IT company has made it to the latest FORTUNE GLOBAL 500. This is despite the industry leader TCS growing faster than the list&#8217;s hurdle revenue. I&#8217;m guessing that the gap between the two last year was too wide to be bridged in one year. Before we do a deep dive into the industry, &#8230; <a title=\"Fortune Global 500 Surges Ahead Of Indian IT Industry\" class=\"read-more\" href=\"https:\/\/gtm360.com\/blog\/2023\/08\/22\/fortune-global-500-surges-ahead-of-indian-it-industry\/\" aria-label=\"Read more about Fortune Global 500 Surges Ahead Of Indian IT Industry\">Read more<\/a><\/p>\n","protected":false},"author":4,"featured_media":11231,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,1],"tags":[],"class_list":["post-11230","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-it-marketing","category-mandatory-category"],"_links":{"self":[{"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/posts\/11230","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/comments?post=11230"}],"version-history":[{"count":6,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/posts\/11230\/revisions"}],"predecessor-version":[{"id":12181,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/posts\/11230\/revisions\/12181"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/media\/11231"}],"wp:attachment":[{"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/media?parent=11230"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/categories?post=11230"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gtm360.com\/blog\/wp-json\/wp\/v2\/tags?post=11230"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}