Indian Companies Hit Their Stride

Newly confident, they're climbing the Asia BusinessWeek 50 with global ambitions

by Manjeet Kripalani

It's been a banner year for India Inc. In March, Tata Steel finalized its $11.3 billion purchase of Dutch steelmaker Corus. In June, wind turbine maker Suzlon Energy paid $530 million for a controlling interest in German rival REpower Systems. Now, drug producer Sun Pharmaceuticals Industries is bidding $454 million for Taro Pharmaceutical Industries (TAROF), an Israeli generics maker. And Tata Steel's sister company, Tata Motors (TTM), could face off against hometown rival Mahindra & Mahindra in bidding for Jaguar and Land Rover, which Ford Motor (F) has put up for sale.

As India's economy grows faster than ever, its newly confident companies are showing their global ambition. And India's moment is evident in the latest BusinessWeek ranking of Asia's top 50 companies. Indian outfits dominate this year's list: There are a dozen in all, ranging from automakers to a mortgage lender to pharmaceutical producers. This diversity is a surprising reversal from just a few years ago, when all the world knew about corporate India was its software shops. This year, there's just one tech player on the list, Tata Consultancy Services Ltd. (No. 23). "India is no longer a one-trick pony," says Subir Gokarn, the chief Asia-Pacific economist for ratings agency Standard & Poor's (MHP).

Other trends play out on the list, which captures the performers with the most dynamic sales and profit growth. (The list weighs two core financial measures: average return on capital and sales growth, both taken over the previous three years—which favors smaller, faster-growing outfits over giants such as Sony (SNE) and Toyota (TM).) Hong Kong property developers capitalized on the surge in real estate prices both in their city and on the mainland. Taiwan's role as tech manufacturer for the world boosted the fortunes of High Tech Computer (No. 2), Compal (No. 18), and Novatek (No. 37). And the rebound in Indonesia, back from the financial crisis that consumed it in 1998, can be seen in the surprising surge of Unilever Indonesia to the top of the list: Indonesians are finally feeling affluent enough to buy more of the company's consumer products.

DREAMING BIG
But the strength of India's showing stands out the most. The Indian companies represented have plenty in common: smart management, low costs, and—increasingly—aspirations to join the elite ranks of multinationals. "All of India is dreaming bigger and aiming higher," says Keshav Sanghi, head of equities for Deutsche Bank (DB) in Mumbai. Tata Consultancy has been building software and tech operations from Latin America to China, while generic drugmakers Cipla Ltd. (No. 10) and Sun (No. 48) now export close to half of their production. It's a good bet that as international giants from Motorola (MOT) to British American Tobacco (BTI) to Renault (RNO) tap fast-growing markets such as India and China, they'll be competing head-on with some of these seasoned Indian players.