How We Did It

This is Business Today's fifth annual ranking of India's best CEOs. We published our first edition in partnership with INSEAD and Harvard Business Review in 2012. Since, BT has joined forces with Pricewaterhouse- Coopers (PwC) India for the study.

Last year, we took into account total income, net profits, market capitalisation and return on equity for our calculations. This year, we focused on the operational performance of companies and their shareholders' returns. For better comparability, the companies were split into four categories based on their total income - super large, large, mid-sized and small. Companies with total income of Rs 1 lakh crore and above were in the super large group, while those between Rs 50,000 crore and Rs 1 lakh crore were considered large. Mid-sized companies were between Rs 10,000 crore and Rs 50,000 crore and small companies had total income of Rs 1,000 crore-10,000 crore. The study universe was the BT500 ranking of India's most valuable companies. We used Ace Equity for our calculations for the period 2013/14 -2015/16. Companies reporting net loss in any of the three fiscals were eliminated from our list. We also did not consider companies whose latest audited financial year results were unavailable. Then, companies whose accounting periods were between nine and 15 months in these periods were considered. For private firms, a CEO had to be in the saddle for the complete study period to qualify; for PSUs, the tenure was a minimum of one fiscal.

Finally, 246 companies qualified for the study. To arrive at the rankings, growth in total income, profit before interest and tax (PBIT), and total shareholders' returns were considered. These parameters were taken net of extraordinary incomes and expenses. And only standalone numbers were used for our calculations.

Companies were assigned a score on the average of year-on-year absolute change and three-year compounded annual growth rate (CAGR) in total income and PBIT. For banking, financial services and insurance (BFSI) companies, profit before tax was considered in place of PBIT, which is a more appropriate operating profit measure for the sector. Both absolute growth and CAGR carried an equal weight of 16.6 per cent.

Total shareholders' returns (TSR) of companies were calculated by taking into account the net price change plus dividends paid for each year during the study period. Companies were scored on three-year TSR average and were given a weightage of 33.3 per cent. All three scores were added to arrive at the final score. Non-BFSI and BFSI companies were assigned a separate score.

Our knowledge support partner, PwC India, reviewed and validated the process. Names of three top CEOs in each group - overall, and sector-wise - were placed before the jury, comprising Nimesh Kampani, Founder and Chairman, JM Financial Group; Kalpana Morparia, CEO of JP Morgan India; Haigreve Khaitan, Senior Partner, Khaitan & Co. and Sri Rajan, Chairman, Bain & Co. India. The jury decided on 22 award categories and 19 winners.