Does Your Company Have an India Strategy? - HBR.org Daily

Indian subsidiaries of multinational companies have a far higher price-to-book ratios than their parent companies, indicating better growth prospects and higher profitability due to India's expanding middle class. Companies without an India strategy risk missing out on a significant opportunity for growth and profitability. The differences between P/B ratios are significant, with Indian subsidiaries such as Hindustan Unilever and Nestle India having P/B ratios of 12 and 82 respectively compared to their parent companies. Better profitability and growth prospects are the reasons for the high P/B ratio, not a lower cost of capital.

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