In Motilal Oswal’s 30th Annual Wealth Creation Study, defense and capital goods companies have been the best performing companies among wealth creating companies in 2020-25. The banking and finance sector has also maintained its position as the largest contributor to wealth creation. A report released in Mumbai on December 11 said that the total wealth created by the top 100 companies during this period reached an all-time high of Rs 148 lakh crore.
Defense remained at the forefront in many performance categories
Hindustan Aeronautics Limited (HAL) has led the ranking in two categories. The stock has emerged as a consistent wealth creator (outperforming the Nifty Total Return index every year over the last five years) and the best all-round wealth creator. During this period it has given 75 percent annual returns. Other well-known defense PSUs include Bharat Dynamics Limited (BDL) and Bharat Electronics Limited (BEL). They have given 70% and 66% annual returns in the last five consecutive periods.
Adani Power, BSE, Persistent Systems and Rail Vikas Nigam made huge profits
Outside the defense sector, the top performers list of all-round wealth creators includes Adani Power, BSE, Persistent Systems, Rail Vikas Nigam, Indian Bank, Varun Beverages, Trent and Jindal Steel. This indicates that there has been strong wealth creation in sectors such as energy, financial services, technology, infrastructure and consumer goods. This report states that wealth creation continues to be challenging, only 13 out of the top 100 companies have been able to perform better every year in the five-year time frame.
Larsen & Toubro among top 10 wealth creators
Capital goods companies have also made good earnings. Larsen & Toubro has been among the top 10 wealth creators. Its market capitalization has increased by Rs 3.97 lakh crore during 2020-25. This sector was also included in the list of fastest wealth creators. In this sector, GE Vernova T&D has given 85 percent annual return and Dixon Technologies has given 79 percent annual return. The study said that cyclical sectors like capital goods/engineering “have been significantly ahead in wealth creation compared to five years ago. The capital goods/engineering sector created wealth of Rs 13,974 billion during 2020-25.
Strong growth in public sector companies
Motilal Oswal’s 30th annual Wealth Creation Study has also highlighted the strong growth in public sector companies. It states that the share of PSUs in the total wealth created in 2020-25 was 25%. The profit turnaround in 7 government companies helped a lot in this. Notably, four of the top 10 all-round wealth creators were PSU companies (including Bharat Electronics and HAL).
Banking and finance remain the highest money making sectors for the second consecutive study
Talking about other sectors, banking and finance remained the highest money making sectors for the second consecutive study. In a period of 5 years, these sectors have created wealth of Rs 36,534 billion, which is more than any other sector. This is due to strong credit growth and better profits (especially in PSU banks).
Multi-Trillion Dollar (MTD) Earning Opportunities in India
Motilal Oswal is of the opinion that India is moving into a “multi-trillion dollar (MTD) opportunity”. Its report said that there is a possibility of strong growth in the long run in sectors like financials, consumer discretionary and industries related to capital spending. Many companies performing well during this period are expected to earn good profits in the coming years also. The MTD theme emphasizes that India’s economic and corporate growth can drive wealth creation in the coming decades. The market will benefit from structural factors such as increasing financialization, rising equity ownership and strong corporate profitability.
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