Corporate giants emerged from the pandemic poised to expand their empires, but have these ambitious moves paid off for shareholders? Mint examines how 16 of India’s top businesses, part of the Nifty50 index, seized post-pandemic opportunities, strategically expanded both organically and inorganically over the past three years, leveraging acquisitions and partnerships to grow their domestic and, in some cases, global footprints.
The question now: did those bold bets deliver tangible returns?
Leading the way, Adani Ports and Mahindra & Mahindra significantly expanded their domestic footprints by increasing the number of plants and offices between fiscal years 2022 and 2024, as disclosed in their recent annual reports.
Anirudh Garg, partner and fund manager at Invasset PMS, highlights Adani Ports’ substantial investments in logistics infrastructure, which helped the company boost its market share from 23% to nearly 30% over two years. Similarly, Mahindra & Mahindra’s push into electric vehicles resulted in a 50% jump in revenue in FY2023. “By scaling up in areas aligned with India’s long-term growth sectors, such as infrastructure and sustainable mobility, these companies are positioning themselves for future resilience,” said Garg.
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Trent, Ultratech, and Shriram Finance also made significant strides in expansion. Sonam Srivastava, founder and fund manager at Wright Research, noted that these firms have capitalized on favourable economic conditions, industry-specific tailwinds, and strategic acquisitions.
“While Adani Ports aims to become a global logistics leader, Mahindra & Mahindra is focusing on emerging markets. Key factors driving their expansion include the post-pandemic economic recovery, government initiatives creating a conducive business environment, growth in sectors like infrastructure, automotive, retail, and cement, as well as strategic mergers and acquisitions that help these companies enter new markets and gain market share,” Srivastava said.
This investment spree has translated into shareholder returns, with eight of these companies delivering more than 25% returns (including dividends) between FY22 and FY24, according to the Mint analysis. Six others posted returns in the range of 10-25%, while two experienced more modest returns under 10%. However, some companies either didn’t report comparable data or saw a decline in their operational footprint.
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Experts caution that corporate expansion, while often viewed as a route to higher shareholder value, carries significant risks.
“While corporate expansion can often lead to higher shareholder value, it’s not a guaranteed outcome,” said Srivastava. “Factors such as effective execution, return on investment, debt management, integration challenges, market competition, and regulatory changes can influence the success of expansion strategies.”
For instance, Ultratech’s aggressive capacity investments led to a temporary drop in return on equity (ROE) from 12% to 10%, due to higher depreciation and interest expenses. Garg of Invasset PMS noted that successful expansion hinges on capital efficiency and well-planned strategic investments. Positive outcomes may take time, and immediate gains are not guaranteed.
Further analysis shows that around 63% of Nifty50 companies achieved a compounded annual growth rate (CAGR) in revenue and profits exceeding 15% over the past four years. This growth came with a solid average return on equity between fiscal years 2022 and 2024, and in some cases, was achieved without increasing debt—demonstrating the companies’ strong financial footing.
However, analysts point out that expansion strategies can impact dividend payouts, as companies must balance reinvesting profits with distributing them to shareholders. “These decisions highlight the trade-offs companies face between rewarding shareholders immediately and funding long-term projects that could drive future returns,” said Garg.
