Why To Have A Wealth Creation Study?
Wealth Creation Study is a company-wide analysis or report conducted by Motilal Oswal Securities Ltd (MOSL) to identify and award companies in India which do exceptionally better than their competitors. Different companies use different strategies and methods to increase profit and better their businesses. What is important though is how well a company is doing and how much profit it has earned aggregated over the past 5 years. And this is exactly what is gauged by this study. The one who stands out – emerges the winner.
Companies will think and come up with new methods and thus, growth is ensured. A study or report on the same can be a good boost for companies to perform better than their competitors. And such studies should thus be encouraged.
Motilal Oswal has been in the business of financial services for many years (since its inception in 1987) and has been considered to be among the major equity and broking service houses in India. 100 top companies are analysed based on their performance and capital generated which is over and above the investment made by the shareholders and/or partners of the company.
Apart from identifying the top performing companies, this study also helps people know the common traits and practices of major companies which act as benchmarks for people to emulate in the future. This is exactly what MOSL expects to do every year.
The three categories for awards are ‘Biggest Wealth Creator’, ‘Fastest Wealth Creator’ and the ‘Most Consistent Wealth Creator’. A special function is held every year to felicitate those who are true winners and holders of these prestigious awards. The companies are ranked based on their annual growth rate for the period of study and the first rankers in the respective categories are awarded.
Motilal Oswal has been conducting this study every year since 1991 and the next study is scheduled to be held on 17th December, 2009. The criterion for participants is that companies should have recorded a minimum of 25% annual growth. Many renowned and reputed companies are expected to participate and compete against each other.
Performance and profits are the sole important points considered, and whoever has better profits than the rest is the winner.
Winners of previous years:
Each year has seen many major companies emerge winners in the categories. In 2006, Pharmaceuticals giant Ranbaxy recorded the most consistent growth, Matrix Laboratories became the fastest growing company and ONGC has the fastest business growth. This year also saw an overall increase in profit and growth by 58%. Great performance was observed in the Sugar, Autos, Textiles and Engineering industries. Oil & Gas, Banks, Metals and Engineering companies contributed in a big way to the profits generated. Domestic companies had also performed well.
2007 saw many new companies taking part in the study, where BF Utilities received the award for the fastest growing company. The four main criteria for analysis were focus on core business, financial performance, quality of management, and speed of wealth creation. The biggest wealth creator award went to Reliance Industries Ltd because of its huge profits in the past years. Consistent growth was found among many companies but the award finally went to Wipro Ltd.
Reliance Industries again created magic by bagging the award for the biggest wealth creator in the following year, i.e. 2008. Infosys, as expected by many, grabbed the award for being the most consistent wealth creator. The fastest wealth creator was Unitech, with a 5-year price CAGR of 284%. This year predicted that telecom, media, retail and insurance companies would do really well in the coming years.
A unique theme was introduced this year which was called ‘Great. Good. Gruesome’, where many eminent personalities form the capital market came together to talk and discuss about the market scenario and opportunities. This year is of course expected to be much bigger and better.
Motilal Oswal Securities Ltd. gives you expert investment ideas. Look out for Motilal Oswal Wealth Creation Study, which is to be conducted on 17th December, 2009.
