Manufacturers in India as well as in other emerging markets are growing faster than in most other countries around the world. This has created a greenfield opportunity for investing in new assets, processes, technologies, and business models. But are the manufacturers in India taking advantage of this unique opportunity and making the necessary investments to lay the foundation for growth and innovation? Our research on Indian manufacturing companies suggests that most are not and that many companies are sacrificing future growth potential for current profitability and cash flow.

This research article from Deloitte Research, the Stern School of Business at New York University, and the Indian School of Business, identifies firm-level drivers for investment growth in key Indian industries. By analyzing the performance of more than 200 Indian manufacturers across automotive components, electronics, and chemicals industries, the study also identifies the outperforming and underperforming companies in terms of investment growth in each of these industries.

This article is the first in a two-part series being published in Sensex magazine, the Bombay Stock Exchange’s premier bimonthly publication. The second article in the series will be published in the June-July issue of Sensex. 

The authors are Atanu Chaudhuri, a research manager with Deloitte Research, Deloitte Support Services India Pvt. Ltd.; Peter Koudal,  director of global manufacturing research at Deloitte Research, Deloitte Services LP; Sridhar Seshadri, the Toyota Professor of Operations Management, Leonard Stern School of Business, New York University, and visiting professor, Indian School of Business.