Shah Group: Priming For Growth

Shah Group was a fifty-year-old yarn trading business with annual revenues of over 120 million USD by 2022-23. The business was started in 1970s in Mumbai, India by Mr. Uday Shah with the help of his brothers. Around the mid-nineties, with the second generation of the family joining the business, the Shah group gradually became one of the prominent names in the industry due to superior knowledge of the textile industry value chain and long-term relationships with clients. It was largely a volume-driven business, and the revenue model was based on trading margins and the interest on credit lines provided to the weaving mills. However, due to the major changes in the industry in the last one and a half decades, the trading margins were depleting, and the company started experiencing challenges in achieving annual growth YOY basis. By 2015, the third-generation members had joined the family business. The family in the business was expanding but business in the family was not. The aspirations of young members had brought Shah group to a crossroad where it needed to strategize its presence in the market. As the year 2022-23 ended, the founder faced the core dilemma of whether the company should leverage the existing business or enter a new business for long-term growth.