Companies should focus on business growth, profitability rather than just share price: NSE chief

Updated 2 July 2026 7:32 PM

{"title":"NSE Chief Calls for Business Growth Over Share Price Hype","excerpt":"Ashish Chauhan, MD & CEO of NSE, urges companies to build sustainable businesses and let true performance drive market valuation.","body_html":"<p>In a recent address that captured the attention of market watchers, Ashish Chauhan, the Managing Director and Chief Executive Officer of the National Stock Exchange (NSE), made a clear statement: companies should prioritize sustainable growth and profitability over the relentless pursuit of share‑price gains. His remarks come at a time when many firms are caught in a cycle of short‑term performance metrics, often at the expense of long‑term value creation.</p>n<h2>Setting the Stage – NSE’s Role in India’s Capital Markets</h2>n<p>The NSE is the largest stock exchange in India by trading volume and a key barometer of the country’s economic health. With a market cap that eclipses many global exchanges, the NSE’s policies and leadership messages can influence corporate strategy and investor sentiment across the board. Chauhan’s recent comments are therefore not just a corporate pep talk; they carry the weight of the nation’s financial ecosystem.</p>n<h2>Why the Share‑Price Focus is a Problematic Trend</h2>n<p>For years, the mantra “share price is king” has dominated boardrooms. While a rising stock price can boost a company’s market valuation, it does not always reflect underlying fundamentals. The core issues with a share‑price‑centric approach include:</p>n<ul>n<li><strong>Short‑termism:</strong> Companies may prioritize quarterly earnings over strategic investments.</li>n<li><strong>Misaligned incentives:</strong> Executives and shareholders can become more focused on stock performance than on sustainable business practices.</li>n<li><strong>Volatility:</strong> Market sentiment can swing wildly, sometimes disconnected from a firm’s actual operational health.</li>n<li><strong>Innovation stifling:</strong> R&D and product development may be sidelined if they do not produce immediate financial returns.</li>n</ul>n<h2>Chauhan’s Core Message – Build Sustainable Businesses</h2>n<p>In his speech, Chauhan emphasized that market valuation should mirror genuine business performance and growth. He urged entrepreneurs to concentrate on their core operations and to adopt a long‑term perspective. Even incremental improvements in profitability and innovation, he noted, can eventually attract market recognition and unlock significant growth opportunities.</p>n<h2>Practical Steps for Companies to Shift Focus</h2>n<p>Below are actionable guidelines that firms can adopt to align with Chauhan’s vision:</p>n<ul>n<li><strong>Re‑evaluate Performance Metrics:</strong> Shift from earnings‑per‑share (EPS) to metrics like Return on Invested Capital (ROIC) and Customer Lifetime Value (CLV).</li>n<li><strong>Invest in Core Capabilities:</strong> Allocate budgets to R&D, talent development, and process optimization rather than short‑term marketing pushes.</li>n<li><strong>Transparent Communication:</strong> Regularly disclose long‑term strategy and progress to investors, reducing reliance on speculative price movements.</li>n<li><strong>Align Executive Compensation:</strong> Tie a significant portion of remuneration to long‑term milestones such as sustainable revenue growth, ESG scores, and innovation outputs.</li>n<li><strong>Build Resilient Supply Chains:</strong> Diversify suppliers and adopt technology to reduce operational risks that can derail long‑term plans.</li>n<li><strong>Engage Stakeholders:</strong> Foster dialogue with employees, customers, and communities to build brand equity that supports enduring value.</li>n</ul>n<h2>Implications for the Broader Economy</h2>n<p>Chauhan’s call has ripple effects beyond individual firms. If companies adopt a growth‑and‑profitability mindset, the following outcomes could materialize:</p>n<ul>n<li><strong>Stable Market Valuations:</strong> Share prices would better reflect intrinsic worth, reducing volatility driven by speculative trading.</li>n<li><strong>Higher Investment in Innovation:</strong> Firms would channel resources into R&D, fostering technological advancement and competitiveness.</li>n<li><strong>Improved Corporate

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