Purpose “The purpose of this paper is to study the effect of Research & development capabilities towards the performance of manufacturing companies by taking an example from the Regional OEM sector in Chennai and Chengalpattu districts in Tamil Nadu, India.” Design/methodology/approach “This paper develops a conceptual model contains Research and Development Capabilities and Business Performance. The research applied SEM - Structural Equation Modeling is used to evaluate the model with 400 Manufacturing enterprises in the OEM Sector. Findings “The observed results of our analysis showed that Research and Development Capabilities positively impact Business Performance. Practical implications “This research underscores the importance of having an R & D innovational environment in manufacturing enterprises to improve its performance. The study provides practical implications for company leaders and policymakers, suggesting that investments in R & D to sustain competitive advantages, foster long-term growth and improved performance. Originality “There is a scarcity of research concerning the Manufacturing enterprise development with present advanced technological improvements, this study is believed to be the first that caters to the effect of R & D capabilities on Manufacturing enterprises for improving operational competitiveness in OEMs with a practical approach.”