Job creation hasn’t slowed much: CLSA
If you thought job losses and lack of employment opportunities were the greatest problems facing Indian companies, think again. The workforce of YES Bank, for instance, grew 34 per cent in 2016-17 over a year earlier to 20,000. Its staff cost during the year increased 39 per cent, reveals a report by brokerage firm CLSA.
The firm’s analysts led by Mahesh Nandurkar, said, “The key takeaway is that contrary to market fears, job creation remains close to last year’s pace, helped by non-banking financial companies (NBFCs).”
The report also observes that HDFC’s earnings per employee was ~3.2 crore in 2016-17, compared with an average of a low ~27 lakh for BSE 500 companies. It added, through Reliance Jio, employment opportunities were created directly and indirectly for more than five million people.
CLSA analysed the annual reports of 76 Indian firms, accounting for $1 trillion or 50 per cent of the total market capitalisation, keeping in view the rollout of the goods and services tax (GST), affordable housing, digitisation, rural recovery, Make in India and smart-city benefits.
Corporate optimism on economic growth has risen during 2017, notwithstanding
Slow capex cycle: Overall, corporate return on equity remained stable, but net-debt-to-equity fell 1% YoY to 26.7% in FY17. Dip in RoE and debt-equity ratios indicates slow capex cycle Job-loss worries overdone: BSE 500 companies’ jobs grew 3.4% in FY17 vs 4.2% in FY16. Drivers: IT and finance Biggest hiring: YES Bank’s workforce grew 34% YoY to 20,000. Highest No. of employees: TCS and Coal India are the only listed firms with 300,000 permanent staff
Women employees: TCS has the highest number of among listed firms at 34% of its total workforce Biggest employers: Financials and tech firms together employ more than 40% of the workforce
Disparity in salary: Ratio of CEO/MD salaries to that of median employees is the highest for Hero MotoCorp at 731x and lowest for PSUs such as SBI at 2.5x
the near-term disruptive impact of the reforms. Most CEOs expect a rural recovery and see the housing scheme as a growth driver, the analysts write.