India Inc must get more competitive on growth

A McKinsey study spotlights the growth imperative: businesses must compete on this score within their industry, not just aim to outpace GDP. It's what competitive markets demand

A study by McKinsey & Company offers empirical evidence of why growth matters for a business. And its findings have led the global consultancy to advocate that businesses should set top-line growth targets not in relation to nominal GDP expansion, beating which often finds mention in corporate annual reports, but against the pace of the industry they operate in, ideally aiming to grow at twice or thrice that rate. Looking to outpace an economy is neither ambitious nor relevant in a rivalrous context. McKinsey’s analysis of 837 listed firms in India with revenues of over ₹750 crore in 2021-22 found that over the decade till 2022, the fastest fifth’s annual revenues grew 1.5 times the 10% pace of our average nominal GDP over that period. But most fared poorly, with the slowest quintile’s revenues shrinking 16% annually. It’s clear that Indian companies must get more ambitious on top-line expansion and compete with peers in their own field. Staying ahead within the markets they address is also what should interest shareholders more.