India's 40 largest companies

Around the start of every winter, Indians worship the goddess of wealth, Lakshmi, as part of their biggest festival, Diwali. This year, some of the companies on our India 40 list had plenty of reason to celebrate, with their market capitalization as much as tripling in a stellar bull run. Infrastructure, energy and banking companies dominated the rankings, as demand boomed in these sectors.

India's largest company by market value and our list-topper Reliance Industries [Get Quote] saw its market capitalization go from $30.7 billion since the last list to $91.54 billion this year. The company run by billionaire Mukesh Ambani had a more modest rise in assets, from $21.70 billion to $30.67 billion. Oil and Natural Gas Corp.--at second spot--saw market capitalization nearly double to $61.81 billion from $31.4 billion. But its assets rose faster, from $18.6 billion to $33.7 billion.

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India's benchmark Sensitive Index (Sensex) has gained 41 per cent this year, as foreign investors pumped around $17 billion into the markets. Domestic companies are seeing strong growth as a rapidly expanding middle class fuels demand for consumer goods and takes bank loans to invest in homes and vehicles. This year, 13 banks made the list, with State Bank of India [Get Quote] topping the sector rankings at No. 3. The country's largest private lender, ICICI Bank [Get Quote], came in a close second at No. 5, up one spot from last year. Others on the list included HDFC Bank [Get Quote], Canara Bank [Get Quote] and Bank of Baroda [Get Quote].

Infrastructure companies also fared well, powered by an increase in state spending on roads, ports and airports as well as rising construction demand for homes and businesses. The government estimates it will need close to $500 billion over the next five years to ramp up infrastructure, a key roadblock to the growth of the economy, which rose 9.4 per cent for the year ending on March 31.

Larsen and Toubro, India's largest engineering company, which won a $1.4 billion contract this month to modernize an overcrowded airport in Mumbai, came in at No. 15, a seven-point jump from last year. Capital goods business Bharat Heavy Electricals [Get Quote] gained 10 spots to No. 13. India's largest real estate developer by value, DLF, was a new entrant, at No. 26. The New Delhi-based company raised a record $2.5 billion in an initial public offering in June. Real estate business Unitech is another newbie, at No. 36. Construction company Grasim Industries [Get Quote] moved up seven spots to No. 27.

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Another sector that grew at a gallop this year was telecom. India is now the world's fastest-growing telecom market, adding around 7 million subscribers every month. Market leader Bharti Airtel [Get Quote] was at No. 9 on the list, up two spots from last year. New entrant Reliance Communications [Get Quote] was at No. 10. Both firms are investing billions of dollars to expand networks, especially in untapped rural areas.

Software services companies, for several quarters the darlings of domestic investors as outsourcing from the West multiplied their profits, lost a little shimmer this year. A rupee that appreciated around 12 per cent against the U.S. dollar since January cut into revenues from their main market of North America. Rising wages and high attrition costs compounded the woes.

India's largest software services company, Tata Consultancy Services [Get Quote], fell two spots to No. 11. Wipro [Get Quote] came in at No. 16, compared with its No. 12 ranking last year. But Bangalore-based Infosys Technologies [Get Quote] managed to hold its own, gaining one spot to No. 14 on the list.

Another casualty of the rupee's appreciation: Adani Exports, No. 37 last year, fell off this year's list, replaced by newcomer Central Bank of India.

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Automobile companies haven't had a stellar year either. The central bank's tightening monetary policy prompted banks to increase interest rates, cutting into the markets for heavy commercial vehicles (between eight and 35 tons) and passenger cars that are financed mainly by loans.

Bajaj Auto [Get Quote] dropped off this year's list, while India's largest carmaker Maruti Udyog [Get Quote] fell one spot to 31. Tata Motors [Get Quote], which controls 65 per cent of the commercial vehicle market, was at No. 22, compared with its ranking at No. 10 last time. Truck maker Mahindra and Mahindra fell five spots to No. 33.

Despite the sector setbacks, this year's India 40 list tells the story of a flourishing economy consolidating its position on the global map. And with a domestic market place of a billion-plus people, 60 per cent of them under 30 years old, the boom is unlikely to falter anytime soon.

We ranked the 40 largest companies headquartered out of India using Thomson Financial's Worldscope database. They were judged on sales, profits, net assets and market value--each metric equally weighted. We excluded publicly traded subsidiaries with greater than 50 per cent ownership of company stock and/or figures consolidated by the parent company from the rankings.