Pakistan’s biggest companies do not even come near India’s top 250. Naturally, even in terms of overall market cap, India is way ahead of its neighbour.
The ongoing Indo-Pak tensions have triggered a comparison of their stock markets as Pakistani shares have been hammered, forcing the authorities to briefly suspend trading on Thursday, May 8.
In terms of overall market capitalisation and the size of the biggest listed companies, India is way ahead of Pakistan. While India’s market cap is $4.24 trillion, Pakistan’s is a mere $44.06 billion.
A more granular comparison shows that the biggest companies of Pakistan do not even come near the top 250 of India.
The biggest listed company of Pakistan is Oil & Gas Development Company Limited, which has a market cap of $2735.48 million, per data from Bloomberg. In India, it would rank around 280. Incidentally, there are just nine companies in Pakistan that have a market cap of more than $1 billion.
Meanwhile, more than 550 companies in India have a market cap of over $1 billion. Moreover, India’s five biggest listed companies — Reliance Industries, HDFC Bank, TCS, Bharti Airtel, and ICICI Bank — each have a market cap of more than $100 billion each.
Even the smallest company in the Sensex pack — Indusind Bank — has a market capitalisation of around $7.5 billion. In Pakistan, valuations start falling to the $~500 million mark by the time we get to the 15th largest company.
Indian firms clock billions in profits
Nearly 20 Indian companies reported cumulative net profits in excess of $1 billion each in the trailing 12 months, per Bloomberg data.
Further, corporates like the State Bank of India, HDFC Bank, and RIL each reported net profits in the range of $8-10 billion during the same period.
In sharp contrast, Oil & Gas Development reported a net profit of just around $740 million in the latest fiscal for which numbers are available. The average net profit of the top 20 largest listed firms of Pakistan is just around $200 million — a fraction of the $3.4 billion for the top 20 Indian companies.
Benchmark performance
In terms of stock market movement as well, the Indian market is much more stable than that of Pakistan.
The KSE-100, the benchmark index of Pakistan, plunged more than 6 percent during intra-day trading on Wednesday, the first trading session after India launched Operation Sindoor. It managed to recoup some of the losses to close three percent lower.
On Thursday, however, trading was briefly suspended on Pakistan Stock Exchange (PSE) as the index fell more than 7 percent, or more than 7,300 points.
On the other hand, the Sensex closed Wednesday with a loss of around 100 points, though Thursday saw the index shedding a little over 400 points after a volatile trading session.
In terms of historical returns, while the last two calendar years have been better for Pakistan, a longer-term comparison clearly shows that India is fundamentally and structurally a much better bet.
In the current year till date, the Sensex is up 3.40 percent while KSE-100 is down a little over six percent.
2024 was the best-ever year for KSE-100, with the benchmark gaining more than 84 percent even as the Sensex gained only 8.17 percent. It was a similar story in 2023 as well, with KSE-100 gaining 54.33 percent and the Sensex up only 18.74 percent.
The pattern, however, is different in the earlier years with the Indian benchmark outperforming KSE-100 every year from 2017 till 2022.
India versus China
Interestingly, while the Chinese stock market is much bigger than India’s — China’s market cap is $10.25 trillion — the size of their companies is comparable.
Only four Chinese companies — the Industrial & Commercial Bank of China, Kweichow Moutai, Agricultural Bank of China, and China Mobile — are bigger than the biggest Indian company, RIL.
