India Delivers World's Best Shareholder Returns in Last Decade: BCG

A BCG report reveals India's capital market as the world's best performer in the last decade, with a 15.2% average annual TSR, surpassing the US and EU. This growth is driven by margin expansion, sector shifts, and strong family firm performance.

India Emerges as World's Best-Performing Capital Market

India has emerged as the world's best-performing capital market over the last decade, delivering the highest average annual shareholder returns globally. According to the India Value Creators Report 2025 released by Boston Consulting Group (BCG), Indian companies delivered an average annual TSR of 15.2% between 2015 and 2025, surpassing the S&P 500 (13.6%), EU350 (7.0%), and major Asia-Pacific markets such as Japan, China, and Singapore.

A Structurally Healthier Outperformance

India's TSR outperformance was structurally healthier and was driven not just by revenue growth, but also by margin improvement and valuation multiple expansion. BCG noted that India's outperformance was structurally stronger than peers, driven not only by revenue growth but also by margin expansion and valuation multiple improvement. This marks a shift from earlier cycles where growth alone powered market returns.

"India's capital markets are no longer just riding macro momentum. They are evolving rapidly with sharper sectoral pivots, stronger capital stewardship, and tighter alignment between corporate leadership actions and investor expectations. What we are witnessing is a structural maturity in how Indian companies are being built, managed and valued," said Kanchan Samtani, leader of BCG's Corporate Finance & Strategy Practice for the Asia-Pacific region.

Key Trends Driving India's Market Leadership

The study identifies three key trends underpinning India's leadership. First, value creation has rotated toward capital-intensive and innovation-led sectors such as Industrials, Green Energy, Metals & Mining, and Technology, supported by government initiatives like production-linked incentives and increased infrastructure spending. Second, family-owned companies have significantly outperformed non-family firms, delivering average TSRs of 20.7%, more than 640 basis points higher. BCG attributes this to a long-term investment mindset and willingness to pursue strategic diversification. Third, India's IPO market has undergone a transformation, with recent listings showing stronger post-listing performance compared to IPOs from a decade ago, reflecting improved governance and preparation.

Shift in Investor Expectations

The report also highlighted a clear shift in market expectations. Nearly 75% of top-quartile performers achieved both revenue growth and margin expansion, compared with only 25% of bottom-quartile companies. Investors are increasingly rewarding capital-efficient, return-generating growth rather than topline expansion alone.

The Next Decade: AI as a Key Differentiator

Looking ahead, the report said, companies' ability to adopt AI and apply digital technologies will be a key differentiator. Investors are moving beyond enthusiasm for AI pilots and demanding visibility into the measurable impact on cost structure, revenue, margins, and operating leverage. Companies that embed AI into their operating models and, in due course, demonstrate returns will define the next decade of capital markets leadership.

(ANI)

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