Financial performance of diversified companies in India: A comparative study of diversified and non-diversified companies

Abstract

The financial performance of 32 relatively matched pairs of diversifying and non-diversifying companies in five Indian industries is compared. The findings indicate that diversifiers generally outperform non-diversifiers on indicators of growth, profitability, safety, and market evaluation. However, inter-industry differences in the benefits of diversification indicate that diversification is selectively useful.