It doesn't take a cigarette-smoking cookie-baking oracle to spot the future trends that lie hidden, barely so, in the matrix of numbers that make up the BT 500. Anyone can do so; all it takes is the ability to stare fixedly and fixatedly (it is ok to blink) at the listing and think of middle-school lessons about Brownian motion. As if by magic, the numbers rearrange themselves into patterns of the less-than-perfect past (in tense corporates, the past is always thus), the emerging present, and the promised future. It's that simple, really.

The BT 500's faculty for presage doesn't take away anything from its primary function: to capture a company's ability to create value through the simple expedient of measuring its market capitalisation over a sufficiently long and reasonably recent period of time. The first motivated the BT 500's decision, in 1997, to rank companies on the basis of average and not point-in-time market capitalisation just as the second did, in 2002, its decision to base the average not on data available for the completed financial year (April 1 of 2001 to March 31 of 2002 in this case) but on that for the recently ended half-year (April 1 of 2002 to September 30 of 2002).

Other corporate listings abound. There are some that include closely held and unlisted companies, but the data is usually of a vintage (at least an year-and-a-half old) that renders it irrelevant. There are others that rank companies on the basis of sales (like the Fortune 500 does), although it has consistently been this magazine's position that only a market value based listing can look at the future.

And there are still others that marry the unrelated measures of sales and assets, ignoring caveats related to asset utilisation (to offer one instance, the average of sales and assets for Essar Oil, at around Rs 4,760 crore is higher than that of Ranbaxy, at Rs 3,690 crore; the BT 500 ranks the first at 172 and the second at 9, which are numbers most people would be comfortable with).

Critics of the BT 500 have long pointed to the imperfections of the Indian stockmarket as reason enough to distrust measures based on stock price. They're right, of course, but only to an extent. Stock prices can be rigged, sales can be MIS-accounted, and the world at large, fooled, but only temporarily. Which is why every BT 500 listing carries information on the previous year. As a dynamic representation of the market's assessment of a company's fortunes over two years, the BT 500 is the closest you can get to a sure thing. And when seen as a saga spread over 13 years-yes, this is the 13th year of the listing-the BT 500 is nothing short of the most accurate chronicle of its kind on India Inc's post-liberalisation fortunes and, more pertinently, the perfect trend-spotter, at least as far as the next big thing is concerned.

Manufacturing is back

Tata Motors' Ratan Tata: The company is on a roll...again

THE PERSONAL TRANSPORTATION TREND: By 2005, India should be a 1-million-units-a-year car market. Vroom!

Macro-economic numbers have suggested this for some time; in the April-June quarter of 2004 for instance, the manufacturing sector grew by 8.2 per cent as compared to the 6.5 per cent by which it grew in the same period last year. And it has been suggested by scattered news reports on the competitiveness and the growing global presence of Indian industry; Bharat Forge, for instance, is the second largest forgings manufacturer in the world and Hindalco, amongst the lowest cost producers of aluminium. Now, further evidence comes by way of the BT 500. For starters, a car maker-the manufacture of automobiles is considered the most complex manufacturing industry-re-enters the top 10 of the BT 500 (Tata Motors, #10) after four years. And another is knocking on the doors of that elite listing (Maruti Udyog, #13 this year, #18 last year). It isn't just these companies; in a period (April to September 2004) when the aggregate average market capitalisation of the BT 50 touched Rs 5,77,571.3 crore, an increase of 74 per cent over the corresponding period in 2003, the share of the automotive sector increased from 8.97 per cent to 10.08 per cent (see BT 500 In Numbers, page 76). In effect, the market sees good times ahead for this sector.

Telecommunications, even cars are the new fast moving consumer goods

Ranbaxy's Brian Tempest: A top 10 regular

THE LIFESCIENCES TREND: Pharmaceuticals, healthcare and biotech rule. All told, the BT 500 boasts 50 companies from these sectors

The market has great hopes of the telecommunications sector. India's two largest telcos, Reliance Industries (Reliance Infocomm is a subsidiary) and Bharti Tele-Ventures have each seen their market value increase by some Rs 20,000 crore in the first half of this year (April to September) as compared to the same period last year. And even Videsh Sanchar Nigam Limited, once a government-owned international long-distance telephony monopoly that is now part of the Tata Group, and Tata Teleservices (Maharashtra) have not fared too badly. Some analysts believe it is the monthly burn on telephone bills (most subscribers of mobile telephony companies such as Bharti use pre-paid cards, and spend a few hundred rupees on this every month) that has motivated consumers to move from high-priced fast moving consumer goods to low-priced alternatives, a phenomenon they term downtrading.

Nestle's Carlo Donati: He's headed for Paris, but even the conservative and stable nestle India has lost some gound in the BT 500

THE FMCG TREND: If there is one sector that has lost ground in the BT 500, it is Fast Moving Consumer Goods. Every company in this sector has slipped

The performance of the FMCG companies in the BT 500 seems to bear this out. Without an exception, all have slipped in the rankings (see The FMCG Trend) with some, like #5 Hindustan Lever Limited even registering a fall in market capitalisation. Since last year, the share of FMCG companies in the BT 50 has declined from 14.19 per cent to 5.85 per cent, one indication that the market does not expect things to get better for the sector anytime soon. It isn't just the telecommunications boom that is hurting FMCGs; it is the EMI (equated monthly instalment) culture that makes it possible for consumers to pay in affordable parts for everything from cars to holidays to salsa classes. In early 2004, India's largest carmaker Maruti Udyog launched what it chose to call the "2599 scheme" for its entry-level Maruti 800 (an EMI of Rs 2,599, over seven years, and a down payment of between Rs 40,000 and Rs 50,000). Today, one out of every three Maruti 800s it sells are under this scheme or similar ones. Last word: As the graphic on page 76 shows, the share of FMCG companies in the top 50 has dropped from 14.19 per cent last year to 5.61 per cent this year.

Tata Power's Firdose Vandrevala: On an upward trajactory	Bharati's Sunil Mittal: Up, up and away
THE POWER TREND: Despite the government's apathy to power sector reforms, business is booming	THE TELECOM TREND: The story of the year. With the number of mobile telephony subscribers set to double again this year, things couldn't be any better

Retail finance, organised retail, retail everything

This year, Indian banks and financial services companies will lend in excess of Rs 65,000 crore to consumers wishing to buy a home. They have issued (and service) over 10 million credit cards. And they-at least, some of them-are at the vanguard of a retail banking and financial services revolution built around reach, the use of technology, and the promise of low-cost service. Today, most of India's 90-odd public sector banks have jumped on to the retail bandwagon, but it takes more to succeed than just the desire to go retail. Marketing aggressiveness, technological felicity, and the ability to cross-sell offerings are the key ingredients of a successful recipe, and companies such as ICICI Bank, HDFC, and HDFC Bank have built their growth strategies around the three. ICICI Bank and HDFC Bank, for instance, can get a new branch up and running in less than a week.

It isn't just retail finance and retail banking that have caught the customer's fancy, but organised retail too. The story of the year, in this sector, has to be Pantaloon India whose iconoclastic CEO Kishore Biyani (he believes organised retail has a great future in India because it is a nation of shopkeepers) seems to have discovered the perfect large-format retail formula, as exemplified by the success of his company's Big Bazaar outlets. And heavyweights such as Reliance, Godrej and the Hero Group are now jumping into the fray.

ICICI's Bank Chanda Kochhar: Retail is it	Pantaloon's Kishore Biyani: The large-format pasha
THE RETAIL BANKING & CONS. FIN. TREND: Using a mix of aggressive marketing and smart technology, banks are targeting consumers in diverse geographical and economic segments	THE RETAIL TREND: Organised retail is big business and could well be the next big thing. PS: Everyone wants a piece of the pie

Anything can be the next big thing

Circa October 2004, the most promising stock picks from the BT 50 would include (apart from usual suspects software, lifesciences, banking and financial services, and automotive) cement, steel, non-ferrous metals, even power. At one level it is possible to dismiss this as a result of a few companies striving to make themselves globally competitive. At another, it presages a move to a more balanced BT 50. The share of the top six sectors (think financial services, automotive, pharmaceuticals, software, fast moving consumer goods, and Reliance, which is big enough to be considered a sector all by itself) in the BT 50 last year was 73.84 per cent. This year, it is 71.47 per cent. And remember, the BT 50 is worth some Rs 2,47,000 crore more this year than it was in 2003.

	Infosys's Nandan Nilekani: Will grow by 45, 46, er 47-48 per cent
	THE SOFTWARE TREND: Still the most promising sector in the BT 500, software is now starting to make an impact in terms of sales too with three $1 billion-plus firms in the top 10

The software and pharma sectors are living up to their promise

There's a long boring way of saying this, and there's a short snappy way of doing so. Here goes an attempt at the second: in 1992, the pharmaceutical sector accounted for 4.42 per cent of the BT 50 by market value and 3.53 per cent of it by sales. In 2003, the corresponding proportions were 10.41 per cent and 4.26 per cent. And in 2004, 9.58 per cent and 5.8 per cent. That means, some of the value the market saw hidden in this sector (which would explain its high share of market value in 2003) is beginning to be realised. The story of the software sector is similar (see BT 500 In Numbers, page 76). Last year, it accounted for 5.56 per cent of the BT 50 by sales. This year it does 9.25 per cent. Need one say more.