largecap companies: Mid & small-caps lag large-cap companies in revenue growth and profitability

For the December 2023 quarter, a sample of 316 large cap companies (market cap above Rs 15,000 crore) reported an aggregate operating margin of 18.3%. For a sample of 762 mid cap companies (market cap between Rs 1,000 crore and Rs 15,000 crore), it was 13.3% and for 2,271 small cap companies (market cap below Rs 1,000 crore), the margin was 5.7%.

Synopsis

Largecap companies outperform midcap and smallcap firms in growth and profitability, maintaining a superior operating margin. Smallcaps exhibit high net profit volatility, raising concerns about sustainability of returns.

ET Intelligence Group: Largecap companies continue to show better growth and profitability at the aggregate level despite having a higher base for financial comparison owing to their large-scale operations compared with their midcap and smallcap counterparts. According to the ETIG’s latest analysis of quarterly results, the aggregate operating margin of largecap companies was in the range of 17% to 23% over the past 13 quarters compared with

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