Leading companies cashing in on India’s compelling growth prospects
Ewan Thompson, manager of the Liontrust India fund, highlights three companies he thinks are well-positioned to generate attractive economic returns


India is often considered the most attractive long-term investment opportunity within emerging markets, and arguably among all global markets. With a powerful demographic story, strong institutions, a vibrant democracy, market-friendly policies and an entrepreneurial business culture, India presents immense growth potential. We seek to capture this by investing in “emerging leaders”: companies well-positioned to thrive in a world of rapid change and disruption – disruption that is especially evident in emerging markets.
These emerging leaders are firms with the resources, capabilities and industry positioning to generate outsized economic returns amid rapid transformation within their sectors. They can be either dominant industry leaders adapting to change, or challengers disrupting their industries. They operate in attractive industry structures with strong competitive advantages but crucially have the vision and financial resources to invest for future growth. Unique assets, technological leadership and the difficulty customers face in switching to other suppliers will allow these firms to defend their position while embracing new technologies enables them to secure digital leadership.
Indian companies moving up a gear
ASK Automotive (Mumbai: ASKAUTOLTD) is India’s leading two-wheeler braking system manufacturer, with a 50% market share and long-term partnerships with the top six industry players. The two-wheeler market is rebounding after a downturn, with expected growth of 10%-15% per year for the rest of the decade. ASK has historically outpaced industry growth by increasing market share and expanding its product range.
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Given the critical nature of braking systems, barriers to entry in the sector are high, requiring proprietary materials and advanced technology. ASK is also well-positioned for electric vehicles (EVs), which require more aluminium, boosting its growth potential. Strong margins and economies of scale are expected to lift returns on capital from 20%-25% as new capacity ramps up.
Zomato (Mumbai: ZOMATO) is India’s leading food-delivery platform and a major beneficiary of rising digital adoption, urbanisation, and disposable incomes. It has expanded into “quick commerce” (fast delivery of groceries and essentials) through its acquisition of Blinkit, capitalising on a booming market. India’s $600 billion food and grocery sector is dominated by small vendors, creating a massive opportunity for Zomato. The company is rapidly entering smaller cities, with new stores breaking even in just two to three months. While competition is increasing, the potential market is expanding, making growth prospects compelling.
Max Healthcare (Mumbai: MAXHEALTH) is one of India’s top private hospital networks. Despite a population of 1.4 billion, India has fewer than 80,000 private hospital beds, driving demand for quality healthcare. Max is growing through hospital expansions and strategic acquisitions, with plans to increase beds from 6,000 to 8,500 within four years. It dominates high-income regions, such as Delhi and Mumbai, boasting the highest revenue per bed in the industry. With a strong focus on specialised treatments (oncology, cardiology, neurology), Max delivers 30%+ return on capital, with further upside as demand for premium healthcare rises.
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Ewan Thompson is a fund manager, having joined Liontrust as part of the acquisition of Neptune Investment Management in October 2019. Prior to joining Neptune in 2006, he worked as an editor for Yale University Press. Ewan graduated from Oxford University in 2003 with a degree in English.
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