Dalal Street Investment Journal – July 20, 2019

DSIJ.in JULY 22 - AUG 4, 2019 I DALAL STREET INVESTMENT JOURNAL (^107)
rising over the years. We can also say
that this shows the country is moving
from being a developing nation to
being a developed country. India stands
as one of the leading economy because
its growth has been led by the service
sector. It plays a larger part in the
Indian economy not only in terms of
employment potential, but also due to
its contribution to national income.
Service sector is the most dynamic
sector in the economy and has
remained the key driver of economic
growth along with being a major
contributor to GVA and the export
basket of the Indian economy.
Factors leading to growth in
service sector
The influence of high demand and
supply has led to the growth of the
service sector. On the demand side, the
high requirement of the input usage from the other sectors
comes into play. On the supply side, many reforms of 1990s
followed by liberalisation policies have induced the growth of
the tertiary sector. The liberalisation in trade is responsible for
the development of finance, transport, communication, etc.
among other service sectors. Also, with the increase in demand
for education for employability purposes and with many
educational reforms and allowances pushing the young Indians
to go for quality education, the service sector is meeting the
equilibrium of demand and supply.
Service sector statistics (Economic Survey 2018-19)
✓ Services sector (excluding construction) has a share of
54.3 per cent in India’s GVA and contributed more than
half of GVA growth in 2018-19.
✓ The IT-BPM industry grew by 8.4 per cent in 2017-18 to
US$ 167 billion and is estimated to reach US$ 181 billion
in 2018-19.
✓ The services sector growth declined marginally to 7.5 per
cent in 2018-19 from 8.1 per cent in 2017-18.
✓ Accelerated sub-sectors: Financial services, real estate
and professional services.
✓ Decelerated sub-sectors: Hotels, transport,
communication and broadcasting services.
Financial performance
To further understand the service sector, we have studied the
financials of top 38 companies belonging to the service sector
chosen as per market cap. These companies put together have
posted positive growth in FY19 in terms of net sales, operating
profit, net profit and EPS.
The aggregate net profit has grown by 15 per cent in FY19 to
2,26,770.49 crore from1,97,900.65 crore in FY18. Grandeur
Products has emerged as the top company in terms of net sales
growth of 4000 per cent to reach 3.80 crore in FY19 as against 0.09 crore posted in FY18. Sat Industries and MMTC posted
net sales growth of 128 per cent and 78 per cent, respectively.
In terms of operating profit, MMTC has registered the highest
growth among the 40 companies in FY19 at 182.18 crore, up by over 700 per cent from21.10 crore posted in FY18. Sat
Industries follows MMTC by posting a growth of 226.83 per
cent in operating profit to reach 32.68 crore in FY19 as compared to10 crore posted in the previous fiscal. Spice
Mobility posted a growth of 172 per cent in operating profit at
15.43 crore in FY19 versus5.66 crore in FY18.
In terms of PAT growth, Future Retail emerges as the winner by
posting 732.81 crore in FY19, up by 6000 per cent from 11.31 crore posted in FY18. Riddhi Siddhi Gluco Biols and
Future Enterprises come in after Future Retail by posting
growth of 675 per cent and 409.58 per cent, respectively.
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1950 1960 1970 1980 1990 2000 2014
Agriculture Industry Services
YEAR
(%)
Share in GDP