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19 Nov 2024
One out of five stocks or 110 scrips from the S&P BSE 500 index have more-than-doubled in the financial year 2024 (FY24), while the benchmark indices were set to report their best performance in the past three fiscals. The primary catalyst for the equities rally is the huge liquidity flows into the market. The S&P BSE 500 index zoomed 39 per cent thus far in FY24.
Meanwhile, the S&P BSE Sensex and Nifty 50 index rallied 25 per cent and 29 per cent, respectively in FY24. Earlier, in FY21, these indices had surged 68 per cent and 71 per cent, respectively.
The foreign portfolio investors (Rs 1.99 trillion) and domestic mutual funds (Rs 1.88 trillion) have collectively made net inflows of Rs 3.87 trillion in equities thus far in FY24, the data shows.
Of these 110 stocks, nearly one-third or 34 stocks are PSU companies. Four companies – Tata Motors, Tata Power Company, Trent and Tata Investment Corporation – are from Tata group; three stocks - Adani Power, Adani Ports and Special Economic Zone and Adani Green Energy – from Adani group.
Indian Railway Finance Corporation, the top gainer among the BSE 500 stocks, zoomed 439 per cent, while Suzlon Energy has skyrocketed 411 per cent in FY24. Housing Urban Development Corporation (HUDCO), Mangalore Refineries and Petrochemicals (MRPL), Jupiter Wagons and Kalyan Jewellers rallied between 300 per cent and 340 per cent. In total 13 stocks have appreciated in the range of 200 per cent to 299 per cent.
Among the sectoral classification, eight stocks were from state-owned banks and power sector, seven each from capital goods, non banking finance companies (NBFC) and pharmaceuticals, followed by information technology (6), defense, auto and realty (5 each), infrastructure (4) and refineries, steel (3 each).
According to global brokerage firm Jefferies, with a consistent history of 10-12 per cent USD CAGR over the last 10 & 20 years, India is now the 5th largest equity market & market cap and will likely touch $10 trillion by 2030. Continued reforms should maintain India's 'Fastest growing large economy' status.
Over the next 4 years, India's GDP will likely touch $5 trillion making it the 3rd largest economy as continued reforms lay the foundation of 7 per cent long-term GDP growth. Consistent and fast growing domestic flows, will likely complement FPI inflows to sustain Indian market performance, Jefferies said.
Since flows into the market continue and are showing no signs of slowdown, a scramble for high quality stocks with good growth prospects is likely, said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
It is important to note that the PSU Bank Index, which has given a stellar return of 90 per cent in FY24, has further potential to go up since there is valuation comfort in the segment, Dr. V K Vijayakumar added.
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