RGCs Grow Inefficiently


Due to the departure of foreign companies and the emergence of new opportunities in the Russian market, the number of rapidly growing companies (RGCs) increased significantly in 2023, rising from 1,034 to 1,711 enterprises. The sector’s structure began to shift under the influence of sanctions, with so-called “gazelle” companies becoming more prevalent in the engineering and automotive industries. However, the overall efficiency of these companies declined, with profitability falling and growth rates for revenue and net profit slowing.


According to the new review of rapidly growing companies by SPARK-Interfax, referenced by Kommersant, the number of RGCs reached 1,711 for the 2019–2023 period, compared to 1,034 for 2018–2022 and 1,227 for 2017–2021. The results account for data over four years: to qualify as an RGC, companies must grow by at least 10% annually and not be affiliated with major holdings or state companies. Both international and domestic studies indicate that the presence of such companies accelerates economic growth, as they contribute significantly to revenue increases and are open to innovation.

The growth of this sector in 2023 is attributed to the recovery of the Russian economy and the filling of gaps left by the exit of foreign companies. The review's authors noted that the sector's growth could have been even more substantial, but due to counter-sanctions and the closure of financial reporting, the number of reporting legal entities decreased by 0.5% in 2023 compared to 2022.

The sector’s structure also changed: the share of RGCs with revenue growth rates of 10-15% fell from 44% to 40%, while the share of more dynamic companies increased. The proportion of companies growing at 15-20% rose from 24% to 25%, and those with growth rates above 20% went up from 32% to 35%.

However, the financial performance of “gazelle” companies slowed compared to the previous period (2018–2022) due to the high base effect. Revenue in 2019–2023 grew annually by 43%, down from 45% earlier, while net profit grew by 72% in constant prices compared to 91% in the previous period. The efficiency of the “gazelles” also declined, with average net profit margins dropping to 7.4% from 9.4%. Analysts had predicted that the import substitution process would be accompanied by reduced production efficiency.

Sanctions have also altered the sector's industrial structure. The automotive and engineering industries have become priorities. The share of RGCs in car manufacturing and trade tripled to 18%, and in engineering, it increased from 10% to 12%. The share of agribusiness decreased from 16% to 12%, the construction sector from 14% to 12%, while the transport sector maintained a 12% share. The most dynamic niches in revenue growth were computer and software trade (77% annually), metallurgy (70%), pharmaceuticals, and computer and electronics manufacturing (62% each).

In terms of average annual net profit growth, the leaders were computer and electronics manufacturing (127%), the chemical industry (103%), and pharmaceuticals (97%). According to the review’s authors, these niches will remain attractive for “gazelles” in the coming years, as only a part of them depends on export supplies, with the majority relying on growing domestic demand. The most efficient sectors for “gazelle” companies also included computer and electronics manufacturing (average net profit margin of 36.4%), information technology (27.9%), the chemical industry (15.3%), engineering (13.3%), and agriculture (12.9%).

Source: Kommersant

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