ET 500: Number of loss-making companies goes up; aggregate loss zooms to Rs 36,788 crore

Prosperity, when it comes, can be accompanied by a sense of irony. The aggregate net profit of cos in the ET500 listing has increased over the years but so has total losses. In addition, the number of loss-reporting companies has risen dramatically in the past eight years

A major reason for the trend is India Inc's increased reliance on funding business expansion through borrowings. Among the companies that reported the highest losses in 2014, the majority were laden with debt. Jet Airways, which topped the chart with a Rs 4,130-crore loss, reported a debt of Rs 10,576 cr

Total net profit posted by ET500 cos doubled to Rs 4.2 lakh crore in 2014 from Rs 2.1 lakh crore in 2007, while the aggregate loss zoomed to Rs 36,788 crore from Rs 2,055 crore, an 18-fold increase. In the latest ranking, 85 cos reported net losses compared with 22 in 2007. This means the average loss per co has nearly quadrupled to Rs 433 crore from Rs 93 crore during the period

Suzlon, next in line with a Rs 3,520-cr loss, had a debt of Rs 17,053 crore. Higher debt without a proportionate rise in revenue & operating profit results in mounting interest outgo for these companies.

Highest Loss-making Companies