Decoding India Inc.'s M-cap Surge

The past year has been a testament to the resilience and dynamism of India Inc. Despite a positive outlook, there are several challenges that companies may face

- MEHUL PANDYA

IN A REMARKABLE display of resilience and growth, the average market capitalisation (m-cap) of India Inc. surged to more than ₹400 lakh crore by September 2024. This significant increase underscores the robust performance of Indian corporates over the past year, driven by a confluence of favourable factors and strategic initiatives.

This growth is not just a number; it reflects the robust recovery and strengthening of corporate performance across several sectors. Investors’ confidence has been revitalised, driven by healthy earnings, strategic reforms, and a broader economic revival.

FACTORS SUPPORTING GROWTH

Several factors have contributed to this unprecedented growth. Firstly, the Indian economy has shown remarkable recovery post-pandemic, bolstered by healthy domestic consumption and a rebound in industrial activity. The government’s sustained focus on capex has further supported this recovery. In the last two years, India’s GDP growth has averaged around 7.5%, and the momentum is expected to remain healthy in FY25.

Policies aimed at stimulating growth, such as the PLI schemes, have played a crucial role in boosting manufacturing and exports. Domestic manufacturing and exports have also received some impetus from the global realignment of the supply chain with the China+1 strategy.