Team Blitz India
NEW DELHI: Indian equities are set to post their best half-yearly (H1) performance in the past three years with the Nifty 50 and BSE Sensex hitting new high by surging 10.6 per cent and 9.7 per cent respectively in calendar year 2024 (H1-CY24). During this period, the BSE Midcap and Smallcap indexes outperformed their large-cap peers with a gain of 25 per cent and 22 per cent, respectively.
The strong rally in equities in H1-CY24 led by the stocks of automobiles, capital goods, telecom and public sector undertaking (PSU) companies. These sectors, analysts said, reported better-than-expected earnings for March quarter (Q4FY24) and attracted domestic investors, who pumped in nearly Rs 2 trillion in the Indian equity markets. BSE Realty index was the top performer that surged 39 per cent, while Power and Auto index rallied 37 per cent and 36 per cent, respectively, in H1-CY24.
A total 10 stocks the Nifty 50 have outperformed the benchmark, as well as broader indices by surging over 30 per cent in H1CY24. Mahindra & Mahindra zoomed 67 per cent, followed by Adani Ports and Special Economic Zone (45 per cent), Shriram Finance (44 per cent) and Bharti Airtel (43 per cent).
While there is lack of valuation comfort in a majority of small-and midcap (SMC) stocks, the large-cap stocks, according to G Chokkalingam, founder and head of research at Equinomics Research, still have some valuation comfort.
“Nifty trades at around 21.5x its FY2025E EPS of Rs 1,093 and at 19x its FY2026E EPS of Rs 1,249. Several pockets of the SMC segment are over-valued and also the SMC segment as a whole is seeing a historical rally for the fourth consecutive year. That said, the medium-to-long term ‘India stock market story’ remains intact. Healthy GDP growth, entry of new investors, large inflows into the domestic mutual funds and robust growth of GST & direct tax collections augur well are likely to keep investor’s interest in the markets alive,” he said.
Meanwhile, as many as 37 stocks from the midcap and smallcap have seen their market value more than double in H1CY24. Of these Waaree Renewable Technologies has zoomed 373 per cent, while, Shakti Pumps, Cochin Shipyard, Transformers and Rectifiers (India) (TRIL) and GE T&D India rallied between 201 per cent and 245 per cent.
