After a modest show in 2022 and the early part of 2023, Dalal Street bulls regained ground and this saw benchmark indices register close to 19% gains year-to-date and achieve new milestones.
This bull run saw about 200 listed stocks give multibagger returns of up to 1153% in 2023.
But it’s the broader market that stole the show, with as many as 190 smallcap stocks turning multibaggers this year, and 143 of them also hitting their lifetime highs, data by Ace Equity showed.
Jai Balaji Industries topped the list of 190 smallcap stocks, giving returns of 1153% year-to-date. The stock also hit a lifetime high last week.
A notable increase in government capex towards infrastructure brought about “ache din” (good days) for the stocks in this sector.
Rail-related stocks – Railtel Corp, Rategain Travel Tech, Rail Vikas Nigam, Texmaco Rail & Engineering, Jupiter Wagons, and Titagarh Rail Systems gave 135-376% returns to investors in 2023 so far and hit fresh lifetime highs.
The government’s push towards local manufacturing and the PLI schemes boosted stocks in the engineering and capital goods sector.
Sanghvi Movers, Precision Camshafts, Schneider Electric Infrastructure, Kesoram Industries, Electrosteel Castings, Tanfac Industries, GE T&D India are to name a few that have gained 143-312% so far in 2023.
Similarly, stocks in the power and related sectors were one of the best performers on Dalal Street, aided by the strong demand and the government’s push towards renewable energy.
Suzlon Energy stood out in this segment, giving handsome returns of 264% to investors this year.
Both mutual funds and foreign investors increased their holdings considerably in 2023.
As of September, FPIs held 10.88% stake in the wind turbine maker, compared to 7.6% in December 2022. Meanwhile, MFs held 4.8% stake compared to just 0.2% in December last year.
In the midcap segment, 8 stocks gave multibagger returns of upto 270%, with five of them in the public sector space. The 8 stocks are REC, Power Finance Corporation, Indian Railway Finance Corporation, SJVN, Aurobindo Pharma, Bharat Heavy Electricals, Trent, and Polycab India.
REC, PFC, Indian Railway Finance Corp, SJVN, Trent, and Polycab India also hit fresh lifetime highs last week.
In the largecap segment, two stocks - Zomato and Hindustan Aeronautics turned multibaggers, giving returns of up to 118%, and HAL also hit a fresh lifetime high last week.
While foreign portfolio investors steadily held their stake above 50% in Zomato in 2023, mutual funds increased their bets in the first three quarters of 2023, thereby aiding the upmove in the stock.
In HAL meanwhile, FPIs increased their bets in the first three quarters of 2023, taking their cumulative holding to 12.63%, according to Trendlyne data.
Outlook 2024
Entering to 2024, most money managers remain bullish on India and expect the momentum to sustain on the back of renewed domestic and foreign inflows even though there are key events such as the general elections and the Union Budget lined up.
Most macroeconomic indicators show that India is one of the fastest growing economies in the world, and a victory for the Bharatiya Janata Party in the recent state assembly elections led to hopes of policy stability.
These factors, coupled with the dovish outlook on interest rate trajectory offered by the US Federal Reserve strengthened the sentiment and drove markets higher.
After the stellar run in the last few months, money managers do not rule out consolidation in the run-up to the general elections, but they recommend staying invested by adopting “buy on dips” strategy.
“I expect significant flows to come into India largely through India-dedicated funds. Maybe on the other side of elections perhaps because that is the only bit of uncertainty, maybe the last week's state elections has ironed out that uncertainty a little bit,” says Pramod Gubbi of Marcellus Investment Managers.
With the expected volatility ahead of the elections, asset managers recommend investors have a relatively higher exposure towards largecap stocks, compared to mid- and smallcaps.
“Smallcaps and midcaps may be exciting at certain points and may give very good returns like they have done this entire year, but largecaps are going to be stable, and when there is turbulence in the market, largecaps, typically tend to be the sector leaders and they will be able to come out of, emerge out of any storm,” says Suresh Sadagopan of Ladder7 Financial Advisories.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
