India's most diverse companies deliver 50% higher profits, says study
ADVERTISEMENT Around 8 out of 10 industries studied showed a positive relationship between the presence of women and profit after tax (PAT) as most diverse companies delivered 50 per cent higher net profit than their less diverse counterparts, according to HR advisory firm Marching Sheep's 'Marching Sheep Inclusion Index 2025' study.
This annual study, conducted by HR advisory firm Marching Sheep's research and analytics wing, analysed data from 840 listed companies across 30 industries, including Manufacturing, Steel, BFSI, Pharma, FMCG, Infrastructure, and IT.
The study further revealed that India Inc is still far from being truly inclusive, especially at the top level.
While women's representation on boards exists owing to statutory mandates, their key managerial positions remained abysmally low, it stated. Over 63.45 per cent of organisations had zero women in key managerial positions (KMPs), the study revealed.
ADVERTISEMENT
Further, it found that India Inc employs only 22 per cent women, compared to the 28 per cent reported in the Periodic Urban Labour Force Survey 2023-24, a clear 6 percentage point gap.
"We don't just need more women in the room; we need them at the table, influencing decisions and shaping strategy," Marching Sheep Founder and Managing Partner Sonica Aron said.
ADVERTISEMENT She said true inclusion isn't about counting numbers but about redistributing power.
"And that shift is still absent. Inclusion is about access, authority, and accountability," she added.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)
Business Standard
16 hours ago
- Business Standard
The margin trap: Why innovation matters more than short-term profits
India needs to get on the innovation cycle - and everyone has a part to play. The government must provide basic funding and strengthen linkages between industry and academia Akash Prakash Listen to This Article One of the clear takeaways when speaking with senior people working with Apple is their disappointment at the lack of willingness among India Inc to step up and make the investments needed to bring the Apple ecosystem into India. While China is putting up obstacles, the profit focus of Indian entrepreneurs is also a stumbling block. Whether it is putting up the component supply chain or making large capital investments for display units, there is a lack of interest on the part of large Indian groups to commit capital. They cite the low margins on offer and the intense scrutiny
Mint
a day ago
- Mint
The Air India catastrophe should catalyse deep structural reform in the country
Next Story Vikas Dimble , Prachi Mishra The aviation tragedy in Ahmedabad calls for economic introspection. India needs to ponder questions of public versus private ownership, market concentration versus competition and diversified versus focused conglomerates. Our take-off for Viksit Bharat may depend on getting the answers right. The Ahmedabad tragedy should serve as more than a moment of grief, it should catalyse the deeper structural reforms necessary for India's sustainable development. Gift this article The tragic Ahmedabad air crash shook the nation, but beyond the immediate grief lies a deeper call for introspection. This isn't about assigning blame, but rather about examining structural questions. The tragic Ahmedabad air crash shook the nation, but beyond the immediate grief lies a deeper call for introspection. This isn't about assigning blame, but rather about examining structural questions. The timing is significant—this accident occurred soon after Air India transitioned from public to private ownership, highlighting three fundamental challenges on India's runway toward developed nation status: How should we balance public and private sector roles? What is the optimal level of market concentration versus competition? And should India Inc embrace specialization or continue with diversified conglomerates that span multiple industries? These questions go beyond aviation, touching the very foundation of India's economic strategy. Yet, aviation provides a perfect case study for examining these broader challenges. Let us start with the public versus public ownership. Also Read: Digital twins of aircraft: A big leap for civil aviation? India is conspicuous with a disproportionately large public sector, compared to other emerging and advanced economies. India's stock market is heavily dominated by state-owned enterprises. But our aviation sector, which has undergone complete privatization, offers a contrast. Globally, aviation ownership models vary dramatically. West Asian carriers remain fully government-owned, Chinese airlines are government-dominated and some European carriers maintain partial government stakes—25% of British Airways' parent company, for instance, is owned by Qatar Airways. Meanwhile, the US mirrors India's approach of minimal government ownership. The privatization of Air India is considered one of the Indian government's most successful divestments. As the private sector takes control, the need for robust regulation becomes critical. The question is not a binary whether or not to privatize, but how to regulate businesses effectively, especially in industries where lives are at stake. The government's role must evolve from owner-operator to an ever more vigilant regulator in both public perception and reality. Also Read: A tale of two sectors: Aviation soars while railways crawl Coming to the dilemma of competition versus concentration, India's economy has long been marked by the outsized influence of family-owned business groups. Remarkably, several of the largest groups from the 1950s still dominate, with the composition of the top 25 largely unchanged since 2010. At their peak in 2012, these groups generated revenues equivalent to 20% of India's GDP. While their dominance has declined somewhat since then, in 2020 that figure was still over 15%—higher than in 2001. The aviation sector typifies these trends. In India, the combined market share of its top two airlines is larger than in other markets globally, far exceeding the share seen in the US, UK, China or Brazil. IndiGo and Air India, both privately owned, carried over 90% of air travellers last year. The US airline industry is also privately owned but its market has much more competition. While larger firms benefit from economies of scale and greater clout, extreme concentration can also stifle innovation and harm consumer interests. Indian policymakers have been on top of this challenge. The sector has been opened to fresh competition repeatedly, but the industry has shown high business mortality, with a long list of airlines declared bankrupt or close to it; Sahara, Jet Airways, SpiceJet, Kingfisher and Go First tell a sobering tale of a harsh market. Why has competition withered in this sector? Is market size the determining factor (America's air traffic is five times that of India), or are there policy or market failures? Cost and efficiency determine survival, but consumer choices matter. Notably, both Air India and IndiGo rank low in global service standards. The transition from a state monopoly to private oligopoly outlines a delicate balance. While India needs stronger regulation in critical sectors, the broader economic imperative often calls for less onerous regulation; theEconomic Survey highlighted calls for greater deregulation and for government to get 'out of the way." Coming to the third issue of specialization versus diversification, economic theory suggests that countries should specialize in industries where they have comparative advantage. We can illustrate this through Bollywood: If Shah Rukh Khan, an economics graduate, specialized in economics, he would have been a successful economist. But even if he were to become the world's best economist, his 'opportunity cost' of missing a career as an actor would be too high, given the low wages he would earn compared to his earnings from cinema. Even with an absolute advantage in economics, his comparative advantage would lie in cinema. Specialization versus diversification represents a distinct strategic choice from concentration versus competition. Firms can maintain high market concentration while remaining either specialized or diversified. The jury is certainly out on this. Global trends reveal fascinating patterns. While emerging-market conglomerates are increasingly diversifying, those in advanced economies, particularly the US, are moving towards specialization. Emerging-market giants like the Tata Group in India (spanning salt to aviation), Samsung in South Korea and Fosun in China have expanded their sectoral reach dramatically, often doubling or tripling their presence across industries. Conversely, developed-market leaders like General Electric, Siemens and Johnson & Johnson have undergone significant consolidation or strategic splits. Most now operate as publicly traded entities with focused business models. So what is the path forward? What does it imply for India's aviation landscape—a three-way combination of private ownership, extreme concentration and the diversified nature of controlling conglomerates? This combination makes the sector distinctive globally but also potentially vulnerable. The stakes couldn't be higher. Markets often face efficiency versus equity trade-offs. Beyond that, there are efficiency and public safety trade-offs, at least in perception. Ultimately, there are no concrete recipes for success. That said, these questions are pertinent. As India marches towards Viksit Bharat, we must find appropriate answers. Our aviation sector's future—and by extension our broader economic strategy—depends on getting many balances right. The Ahmedabad tragedy should serve as more than a moment of grief. It should catalyse the deeper structural reforms necessary for India's sustainable development. Only through such introspection can we build an economy that is both dynamic and safe, competitive and responsible. The authors are, respectively, operations director, Ashoka Isaac Center for Public Policy (ICPP); and professor of economics, and director of ICPP, Ashoka University. Topics You May Be Interested In Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
Economic Times
4 days ago
- Economic Times
IT sector set for 2H25 comeback backed by low base, global tailwinds: Ambit Capital
After a muted first half, India's IT sector may be gearing up for a meaningful revival in the latter half of 2025. In this edition of ETMarkets Smart Talk, Nitin Bhasin, Head of Institutional Equities at Ambit Capital, along with Bharat Arora, shares why the sector is entering a favourable zone—driven by seasonality, an uptick in global tech demand, and contrarian signals like low index weight and weak CEO confidence. The duo also offers a detailed playbook for navigating FY26's volatile and concentrated market, including preferred sectors, fixed income strategy, and the rising importance of quality and low-volatility stocks in a stock-picker's market. Edited Excerpts - ADVERTISEMENT Q) Thanks for taking the time out. Nifty closed with marginal gains in June, but for the first six months of 2025, it is up over 7%. How do you see markets for the rest of FY26? Any big events to watch out for?A) We are in the phase of rise in stock market concentration, wherein market returns are muted, and large-caps outperform mid-caps and small-caps. This has been the case in CY25TD wherein large-caps (8%) have outperformed mid-caps (4%) and small-caps (relatively flat), and we expect this to worsen going forward. Time to be selective as FY26 is expected to be a stock-picker's market & we expect this trend to continue in FY27 as the next few months, we believe a key monitorable will be trailing market returns. Historically, moderation in returns has led to moderation in DMF equity flows, which have already halved since Dec-24. ADVERTISEMENT Even if markets remain at current levels, TTM returns of Nifty as well as top mid-cap & small-cap schemes are likely to remain muted/negative as base hardens, which can further exacerbate correction.Q) How are you managing the volatility in your portfolio? Any key learnings which you would like to share from 1H2025? A) Defensive sectors such as FMCG, Pharma and IT are the biggest OWs in our model portfolio, due outperformance in periods of rising market concentration. ADVERTISEMENT Historically, FMCG & Pharma have exhibited lower volatility in returns as compared to other 1HCY25, market breadth remained narrow with median stock (-0.5%) lagging the NSE500 index (5.5%) by ~6%. We expect this to continue going forward and expect CY25 to be stock-picker's market. ADVERTISEMENT Headline earnings growth is slowing down, with Nifty FY25 earnings at ~7%, while FY26E estimate stands at ~7%, the lowest in recent times. In such an environment, Quality and Low Volatility factors outperform, which has been the case over the past year. Q) One of the reports suggested that India Inc.'s profits have grown nearly 3x faster than GDP since FY20. What structural factors are driving this divergence? A) Since the pandemic, India Inc. has focused on balance-sheet deleveraging instead of capex investments, which led to lower interest costs. ADVERTISEMENT As a result, profit margins and return ratios have significantly improved, which has led to 21% CAGR growth in BSE500 PAT over the last 5-years as compared to ~8% CAGR GDP other structural factor driving this has been shift in market share from unorganized to organized players across businesses have gained scale, pricing power, and profitability as informal competitors exited or struggled to growth in employee cost has declined from 9% in June-20 to 5% in Mar'25, which has also been a trigger for high profit growth. Q) With the China+1 theme gaining traction, which Indian sectors are best placed to attract global capital and scale? A) India has struggled to capitalize fully on the 'China +1 strategy' with NITI Ayog, the government's think tank admitting limited gains so far. Electronics has seen the biggest gains with Apple's plans for continued expansion in India (despite Trump's threats) highlighting the country's growing foothold in the global electronic supply chain. This has also benefited Indian EMS players which have seen a lot of traction from both import substitution and exports. As China vacates lower value-added manufacturing, textiles, toys, engineering goods, and pharma stand to gain. Q) How is fixed income as an asset class looking for long-term investment? How much money should one allocate as a hedge to combat volatility? A) Our GRIP framework (Growth, Risk premium, Inflation and Positioning) suggests a weak outlook for equities and asset allocation in favor of earnings growth slowing down (FY26E estimate is one of the lowest starting earnings growth estimates in recent times) and valuations remaining elevated, we do not expect significant outperformance of equities over risk premium is increasing due to growth slowdown, whereas reduction in inflation makes bonds more the long-term, favourable macroeconomic conditions and structural drivers like resilient domestic demand, fiscal consolidation, and global bond index inclusion should support the bond market. Should global uncertainties and geopolitical tensions abate, benign/stable inflation and lower interest rates would remain positive Nifty has considerably outperformed bonds over the last decade. While market returns can be volatile in the short-term, equities remain the best-performing asset class over a longer horizon. Q) Which sectors are likely to remain in the spotlight in 2H2025? A) IT exhibits strong seasonality wherein bulk of returns (~17% median) are generated in 2nd half of the year (2HCY1HCY). There has been marginal improvement in S&P500 CY25E revenue growth, which exhibits a strong correlation with tier-1 IT revenue triggers such as exposure to the Quality factor (outperforms in an earnings growth slowdown environment) & IT index weight at a 16-year low, should lead to IT outperformance in CEO confidence index is at one of the lowest level, which is a strong contrarian indicator for IT outperformance. Q) Can we say that we are in a "stock picker's market" ahead? If yes, what are the key traits investors should look for in FY26 picks? A) Yes, we are in a stock picker's market. Earnings growth seems to be the key. Stocks with moderate by predictable earnings growth should be preferred over high growth stocks with risk to earnings a factor perspective, we prefer Quality and Low volatility stocks which have historically outperformed in an earnings growth slowdown India's structural story remains intact, we are in a cyclical slowdown at the mid-cycle. Historically, Nifty's earnings estimate trajectory used to be revised downwards each year (~8%) leading up to the financial year but earnings cuts were minimal in this cycle, which have now government is deploying counter-cyclical tools like repo-rate cuts, CRR cuts, tax relief, and fiscal spending to revive demand and boost growth. Q) Gold has also seen a tremendous run in 2025 – how do you see the yellow metal shining in 2H2025? Time to book profits or add on dips? A) Elevated geo-political uncertainty led to significant rise in gold prices over the past few quarters. However, we believe that within commodities, its silver's time to Silver/Gold ratio currently trades at -1 S.D below its LTA (7-year) and we expect mean reversion to manifest & gold to underperform silver in the near-to-median industrial demand (accounts for ~50% of total silver use) is surging. Green energy policies globally are amplifying silver's role as a key industrial the supply side, mine output remains constrained due to high operational costs and lower ore grades. This supply-demand mismatch can further accelerate silver's outperformance in the near-to-medium from a tactical perspective, the commodity exhibits a strong seasonality in returns with July historically being the best-performing month. Q) How should one play the small & midcap theme? Has the profitability improved compared to large caps? What does the data suggest? A) SMID profit contribution to the NSE500 universe significantly accelerated since the pandemic but peaked in March-23 at 28%. However, Mcap contribution has remained elevated at ~33% (ATH), while PAT contribution currently stands at 26%. Despite the recent correction, mid-caps and small-caps continue to trade at a significant premium to large-caps as well as their respective 7-year average multiples. Moreover, EPS estimates trajectory appears better in large-caps vs SMIDs. Heavyweight sectors in SMID such as Capital Goods and Chemicals have witnessed significant FY26E earning downgrades in CY25TD. With expensive valuations and deteriorating earnings growth, divergence appears unsustainable. We continue to prefer large-caps over SMIDs, and within large-caps prefer don't expect SMID valuation premium to sustain as the built-in growth rate is too high. However, India remains one of the fastest growing economies & over the long-term is likely to outperform EM peers. Q) Any sector that is running out of steam and investors should carefully pare their positions. A) We had been considerably OW on Banks for a long-time, but turned UW last month. Until 4QFY25, BFSI had been the primary driver of Nifty as well as NSE500 earnings growth since Jun' the trajectory appears to have changed & is expected to continue in FY26E. Large-cap Banks median PAT growth stands at-4% for least 2 of 3 key variables, loan growth, NIMs & asset quality, are less optimistic for FY26E, with pressure on NIMs evident. Banks with higher share of fixed-rate/MCLR loan portfolio will benefit and only ICICI/HDFC Bank stand out. From a tactical perspective, Bank Nifty/Nifty ratio touched +2 S.D in June'25, a level from which Banks have historically underperformed the markets in most instances over the following 6-12 months. (Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
