Reinventing Businesses

PROVIDING DIRECTION IN UNCERTAIN TIMES

By Deepak Malkani

This is the ninth edition of ranking of India’s Best CEOs. This year also, we teamed up with PwC to work out a methodology for the survey. This takes into account both quantitative performances as well as qualitative aspects.

For this year, we started with the quantitative exercise to shortlist the top three performers in each segment. Before calculating the quantitative performance, we used a series of checks and filters. Our study universe was the BT500 ranking of India’s most valuable companies. Only companies with revenues of more than 1,000 crore were considered. Data was sourced from Ace Equity. The study period was three years: 2019/20, 2018/19 and 2017/18. Then, companies whose accounting period was between nine and 15 months in these periods were considered. Companies, whose latest audited financial year results were not available, were eliminated from the list. We also removed companies that reported a net loss in any of these three financial years. Companies that listed during the study period were also not considered. Three companies were eliminated due to ethical/other reasons. To qualify for the rankings, CEOs (or executive heads) must have been in the job for the full study period. In case of PSUs, the period was a minimum of one fiscal. A total of 242 companies qualified for the study.

To arrive at the rankings, growth in total income, profit before interest and tax (PBIT) and total shareholder returns (TSR) were considered. These parameters were taken net of extraordinary income and expenses. Only standalone numbers were used. Companies were assigned a score on the average of year- on-year absolute change and three-year compounded annual growth rate (CAGR) in total income and PBIT. For banking, financial services and insurance (BFSI) companies, profit before tax was considered in place of PBIT. We also included this year a new metric on NPAs for BFSI companies. Only geometric CAGR was calculated and given a weightage of 25 per cent. TSR was calculated taking into account the net price change plus dividends. Companies were scored on three-year TSR geometric CAGR and were given a weightage of 33.3 per cent. All three scores were added to arrive at the final score. In BFSI companies the four categories were each given a weightage of 25 per cent.

For better comparability, companies were split into four categories — Super large (total income 1 lakh crore plus); Large ( between 50,000 crore and 1 lakh crore); Mid- sized ( between 10,000 crore and 50,000 crore); and Emerging ( between 1,000 and 10,000 crore). Our knowledge support partner, PwC India, reviewed and validated the process. Names of three top CEOs in each group — overall, and sector-wise — were placed before the jury, comprising Ashu Suyash, MD & CEO, Crisil; Cyril Shroff, Managing Partner, Cyril Amarchand Mangaldas; Harsh Goenka, Chairman, RPG Enterprises; Raamdeo Agrawal, Chairman, Motilal Oswal Financial Services and Zarin Daruwala, CEO, Standard Chartered India.