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The Rs 2.5 lakh crore war chest: How India’s 5 richest companies are using their cash – Stock Insights News
There can be ample reasons why a company builds up a Cash hoard. If you look at the positive side, a company having a higher amount of cash and cash equivalents means it has better liquidity, can meet short-term obligations without any hassle. It can pursue significant opportunities, including acquisitions, that come its way even without relying on debt. Even if the company borrows money, it can negotiate better, which can lower its borrowing costs. Also, excess cash can help the company pay regular dividends to its shareholders.
However, on the flip side, excessive cash and cash equivalents can also mean that the company is inefficiently using its cash, not deploying the same for growth or seizing new opportunities. Missed opportunities can lead to poor growth of the business, which in turn affects the shareholders’ return adversely.
Here, cash and cash equivalents include cash on hand, the cash balance in the bank accounts, and any advances or deposits that a company has.
In this article, we will be exploring five such companies which are having one of the highest amounts of cash and cash equivalents in India. We will try to figure out whether these companies are putting these enormous amounts of cash to work or not. And thereby if there’s a case to return the money to shareholders or not.
Let’s begin.
#1 Reliance Industries Limited (RELIANCE)
Reliance Industries Ltd. needs no introduction. It is the flagship of the Mukesh Ambani group of companies. Reliance is one of the biggest crude refineries not only in India, but globally. Apart from crude, it has significant presence in the retail segment, be it fashion, electronics, pharma, or even groceries, and more. That’s not all, Reliance is present in the digital service space with Jio, as we all know. It also has a presence in the media and entertainment world as it owns the renowned Network 18 Media House.
Reliance Industries is at the top of our list with a total cash balance of ₹1,06,502 crore as on 31 March 2025, with a cash per share of ₹78.7 (5.30% of share price).
In the case of Reliance, perhaps such a large cash hoard is justified. Given the scale of operations, and the huge commitments to future capex. For instance, Reliance had capital expenditure (capex) of ₹1,31,107 crore in FY25. A significant share of this capex was put for expansion of the vinyl chain. The company acquired land around Dahej for building its multi-modal facilities for logistics support. It also acquired Nauyaan Shipyard, added new jetties, and more.
For FY26 and FY27 capex requirements are already placed for expansion projects. Under the expansion projects, Reliance is eyeing manufacturing 1 Metric Million Tonnes Per Annum (MMTPA) of specialised polyester by end of FY27. With another expansion project, the company is looking to increase its PVC production to 1.5 MMTPA which can make Reliance as the 5th largest PVC producer globally.
Coming to financials…
In FY25, the sales grew by 7.30% to ₹9,64,693 crore from ₹8,99,041 crore in FY24. Even the net profit increased by 2.9% during the period from ₹79,020 crore in FY24 to ₹81,309 crore in FY25.
Looking at its Return on Capital Employed (ROCE) and Return on Equity (ROE), it seems the oil giant has been delivering moderate returns to its shareholders. Reliance has an ROCE of 9.43% and an ROE of 8.51% for FY25, which is right at par with the industry median numbers. Even the dividend payout ratio is the same as the industry median of 10.69%.
The debt levels of Reliance are also moderate at 0.44, as the industry median also stands at 0.44, suggesting the company is using leverage for its growth while maintaining high liquidity.
Coming to the valuation, Reliance Industries is trading at a Price/Earnings (PE) Ratio of 28.87x, at par with the industry median. However, its 10-year median PE is 22.84x, higher than the industry number of 10.29x. Even the Price Earnings to Growth Ratio (PEG) is at 2.82, more than double the industry median of 0.97.
#2 Tata Motors Limited (TATAMOTORS)
Tata Motors Ltd. is a part of the prestigious Tata Group of Companies and a leading global automobile manufacturer. It offers a variety of automobiles ranging from personal cars to trucks, buses, sports utility vehicles, to even defence vehicles. Hailing from India, this auto giant sells its vehicles across the globe, whether it’s the US, China, Europe, or the rest of the world.
As of 31 March 2025, the cash and cash equivalents of Tata Motors stood at ₹40,834 crore, with a cash per share of ₹110.92 (16.30% of share price). This huge cash hoard might be justified as the company is navigating through a shift from internal combustion to electric vehicles.
From the EV passenger vehicle segment, new launches are already in the pipeline for FY26. This fiscal, Harrier EV, Sierra EV will be launched, which will further strengthen the existing EV business of the auto giant. Apart from EVs, Tata Motors will be launching refreshed models of new Altroz, Harrier and Safari with multi-powertrain features which will come in petrol model.
Coming to the financials of the company…
The sales for FY25 were ₹4,39,695 crore, registering a marginal increase of 1.31% from FY24’s ₹4,34,016 crore. The net profit dropped 12% from ₹31,807 crore in FY24 to ₹28,149 crore in FY25.
Even though the profits dropped during FY25, Tata Motors delivered significant ROE to its shareholders. For FY25, the ROE of Tata Motors stood at 28.08% while the industry median is 19.37%. The ROCE stood at 19.97%, a bit lower than the industry median of 21.08%. The dividend payout ratio is at 7.93%, marginally higher than the industry median of 7.25%.
However, the debt-to-equity level of 0.62 is higher than the industry median of 0.04.
The valuation of the company also looks quite interesting. The company is trading at a PE of 8.87x, which is way lower than the industry median of 32x, and its 10-year median PE is also at 14.38x, significantly lower than the industry figure of 32.59x. Even the PEG ratio is at 0.24, way lower than the industry number of 0.62.
To know why Tata Motors stock may appear to be cheap, read our story, Tata Motors: Cheap for a reason or a missed opportunity?
#3 Hindustan Aeronautics Limited (HAL)
Hindustan Aeronautics Ltd. (HAL), a public sector undertaking, is a leading Indian aircraft manufacturer. From manufacturing aircraft, helicopters, their accessories, and parts, to offering repair services, maintenance, it does it all. HAL holds a strategic position in the Indian Defense program as it is the core equipment supplier to the Indian Defense Services. It primarily works with the Ministry of Defense and on the orders and contracts given by the Ministry.
The cash and cash equivalent of HAL stood at ₹38,182 crore as on 31 March 2025, with a cash per share of ₹570.91 (11.70% of share price). The order book of HAL perhaps justifies this huge cash hoard. At the end of FY25, the order book stood at ₹1,89,300 crore, which is almost double that of FY24’s ₹94,127 crore. HAL has secured new manufacturing contracts worth ₹1,02,337 crore, which include 240 AL-31FP engines, 156 LCH Prachand, and 12 Sukhoi-30MKI. Further, the company expects orders worth ₹1 lakh crore in the coming 1-2 years.
Coming to the financials…Sales at HAL increased marginally from ₹30,381 crore in FY24 to ₹30981 crore in FY25, registering only a 1.97% growth. However, net profit jumped from ₹7,621 crore in FY24 to ₹8,364 crore in FY25, a 9.75% growth.
The return ratios of the aircraft manufacturer also justify the cash balance and indicate that it is returning well to its shareholders. The ROCE stood at 33.87% for FY25 while the industry median was 19.14%. Similarly, the ROE was at 26.07%, way above 14.38%. This defense stock is offering a higher dividend payout at 19.99% while the industry median is only 3.21%.
HAL is a debt-free company while the industry median debt-to-equity ratio stands at 0.08.
Coming to the valuation of the company, it is trading at a PE of 37.21x while the industry median is 72.57x. Its 10-year median PE is 13.49x while that of the industry is 39.05x, indicating room for growth. The PEG ratio also indicates the same, as it stood at 1.52 compared to the industry median of 2.23.
#4 Coal India Limited (COALINDIA)
Coal India Ltd. (CIL) is the single largest coal producing company globally. It is engaged in the mining and production of coal and also operates coal washeries. The main clients of CIL are the power and steel producers and also cement manufacturers, among others. The production capacity of the CIL stood at 781 million tonnes (MT) in FY25. The projected production of CIL for FY26 is around 875 MT, and by FY30, CIL aims to increase the capacity to 1,043 MT.
The cash and cash equivalent of CIL stood at ₹34,215 crore as on 31 March 2025, with ₹55.52 as cash per share (14.60% of share price). The company is probably using more cash to offer higher returns to its shareholders in the form of dividends rather than investing in future growth prospects. CIL has a dividend payout ratio of 46.19%, while that of the industry is 26.97%.
Coming to the financials of CIL, sales increased marginally by 0.73% in FY25 from ₹1,42,324 crore in FY24 to ₹1,43,369 crore. The profit decreased by 6% from ₹48,813 crore in FY24 to ₹46,966 crore in FY25.
The ROCE of CIL is 48.04% more than the industry median of 34.91% and the ROE is 38.83%, while the industry median is 29.28% suggesting that the company is offering a higher return than the industry, even though its profit decreased during FY25. The debt levels are also minimal at 0.09, while that of the industry is at 0.4.
The valuation of the firm also looks relatively attractive as it is trading at a PE of 6.78x, cheaper than the industry median of 11.6x. Even the 10-year median PE of CIL is 7.5x, lower than the industry number of 10.62. The PEG ratio though, is at par with the industry median of 0.42.
#5 Oil & Natural Gas Corporation Limited (ONGC)
Oil & Natural Gas Corporation Ltd. (ONGC) contributes to over 70% of India’s crude oil production and above 80% of the natural gas production. With various oil fields, it is the largest crude oil and natural gas production company in the country.
At the end of FY25, the cash and cash equivalents of ONGC stood at ₹27,178 crore with a cash per share of ₹21.6 (8.90% of share price). The future capex plans of the oil giant perhaps justify the cash hoard. For FY26 and beyond, ONGC has plans to invest around ₹30,000 crore to ₹35,000 crore yearly, primarily for green energy production.
The sales for FY25 jumped from ₹5,91,396 crore in FY24 to ₹6,63,262 crore, registering a 12.15% growth. However, during the same period, the profit tanked 28% from ₹57,101 crore in FY24 to ₹38,329 crore in FY25.
However, the company has delivered industry-par return to its shareholders during FY25. The ROCE stood at 12.42%, while the industry median is 12.35%. And the ROE stood at 10.68%, a little below the industry median of 11.24%. However, ONGC’s dividend payout ratio stands at 42.54%. Among its immediate peers, only Oil India pays dividend..
The debt-to-equity ratio is higher at 0.55 compared to the industry median of 0.19.
However, ONGC’s valuation looks attractive as it is trading at a PE of 8.53x, lower than the industry median PE of 12.29x. Then its 10-year median PE is 8.34x, way lower than the industry figure of 22.21x, and its PEG ratio is at 0.44, lower than the industry number of 1.17x.
Wrapping up
So, these companies with astounding cash hoards are offering returns to their shareholders and have significant growth and expansion plans, which perhaps justify the huge cash balances in their books. Having said that, it will be interesting to see how efficiently they use their cash hoards and continue to offer higher returns to the shareholders or not.
Disclaimer
We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Maumita Mitra is a seasoned writer specializing in demystifying the world of investment for a broad audience. She has a keen eye for detail and a knack for explaining complex financial concepts in the simplest manner possible.
Disclosure: The writer and her dependents do not hold the stocks discussed in this article.
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