This got further exacerbated in the backdrop of the pandemic, smaller companies with their lower levels of resilience and limited sources for raising financing resulted in positive economic outcomes for larger players. Their already high market shares got a further fillip as suppliers, distributors, financiers, customers all resorted to ‘safer’ and ‘trusted’ brands. Apart from growth, this enhanced market share provided a cushion against lock-downs, lowering demand during the pandemic, says Varun Manmohan Kapur.
This thesis is visible in the outsized returns over the last one year (during which there were 2 lock-downs) generated by these large private players with high market shares in their respective business segments (equity returns mentioned below exclude dividends):
Bajaj Finance – 95%
L&T – 79%
Asian Paints – 74%
Pidilite Industries – 71%
Titan Industries – 63%
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