CAN EVERY COMPANY SCALE UP?
Here is some interesting data of how the companies in market have evolved in terms of profitability over last 10 years. History has proved that it is difficult for smaller companies to become big. The thread below proves the same.
Source:Ace Equity.
Here is some interesting data of how the companies in market have evolved in terms of profitability over last 10 years. History has proved that it is difficult for smaller companies to become big. The thread below proves the same.
Source:Ace Equity.
1. The chart indicates that only 62% of listed companies are profitable and this % has significantly reduced since 2010. This indicates that not all the companies are able to sustain and perform in the changing business environment. 
2. The chart shows that the % of companies making profit greater than 50 crores have increased by just 6%. This signifies that only few companies can climb up the next step in ladder.
3. The chart below shows the real picture of difficulty in scaling up. The chunk of increase in companies making profit of greater than 50 crores is taken by bigger companies who are generating profit of greater than 100 and 500 crores.
Key takeaways -
1. The no. of companies generating profit of greater than 100 crores have increased over a period indicating that the big companies continues to grab the piece of profitability from other smaller companies which depicts their strength and power to adapt.
1. The no. of companies generating profit of greater than 100 crores have increased over a period indicating that the big companies continues to grab the piece of profitability from other smaller companies which depicts their strength and power to adapt.
2. Major economic reforms like GST, IBC and RERA has made the smaller companies more vulnerable. We feel the same will continue as we move forward towards becoming a formalized economy.
