Recap 2023, Marching into 2024 (Stock Market Index Winners)

28 Dec 2023 , 12:03 PM

YEAR 2023 – HOW DID STOCK MARKET INDICES PERFORM?

As we come to the close of year 2023, it is apparent that we will be closing the year at a historic peak or very close to the historic peak. It is not just that the indices have rallied, but the quality of the rally has been also good. The large cap indices like the Nifty and Sensex have rallied anywhere between 18% and 20%. There have been several reasons. FPIs have infused more than Rs2.20 trillion into Indian markets in the year 2023 so far, across debt and equity. The market cap of the Bombay Stock Exchange is now at $4.25 trillion making it among the most valuable stock markets in the world. The Buffett Ratio (market capitalization to GDP) stands at 118%, which may be higher than the historic median, but still lower than many other countries. It is in this context that we look at the outperformers among generic indices and also specific stocks that triggered the movement in these indices.

BEST PERFORMING GENERIC STOCK MARKET INDICES IN 2023

Here we look at generic largely cap indices like the Nifty and the Sensex and we also look at one representative from emerging large caps, mid-caps, small caps, and micro-caps. The table below captures the yearly performance of these generic indices.

Generic Index	Closing Value	1-Year Returns	52 Week  Low Value	Bounce from 52-week Low
NIFTY MICROCAP 250	18,585.65	69.11%	5,802.95	220.28%
NIFTY SMALLCAP 100	14,933.35	54.82%	8,682.00	72.00%
NIFTY MIDCAP 100	45,558.95	45.63%	29,200.20	56.02%
NIFTY NEXT 50	52,680.20	25.01%	36,850.75	42.96%
NIFTY 50	21,654.75	19.43%	16,828.35	28.68%
SENSEX 30	72,038.43	18.27%	57,084.91	26.20%

Data Source: NSE / BSE

To begin with, all the major generic indices have given positive returns in year 2023 with the Nifty and the Sensex returning between 18% to 20% for the year. The clear outperformer for the year was the Nifty Microcap 250, which covers the stocks that are even smaller than the small cap stocks. It is not just the annual returns on these indices, but even the bounce from the lows which is very impressive. In fact, the top performing Nifty Microcap 250 has actually bounced 3-fold from the lows of the year. Having seen the broad index level performance, let us move to the index constituents.

NIFTY 50 – HOW DID THE BASKET OF STOCKS PERFORM?

The table below captures the best performing stocks in the Nifty 50 index. These are ranked on 1-year returns.

Generic Index	Closing Value	1-Year Returns	52 Week  Low Value	Bounce from 52-week Low
TATAMOTORS	740.30	87.97%	375.20	97.31%
BAJAJ-AUTO	6,714.00	86.85%	3,520.05	90.74%
NTPC	306.80	85.26%	161.90	89.50%
LT	3,545.00	66.85%	2,051.00	72.84%
COALINDIA	366.00	65.24%	207.60	76.30%
HEROMOTOCO	4,067.45	50.40%	2,246.00	81.10%
TITAN	3,689.00	47.36%	2,269.60	62.54%
ULTRACEMCO	10,469.95	46.84%	6,604.10	58.54%
LTIM	6,273.05	43.20%	4,121.00	52.22%
HCLTECH	1,470.00	42.04%	1,016.25	44.65%

Data Source: NSE / BSE

Here are some interesting takeaways on the Nifty 50. For the year, the index generated 19.43% returns and it bounced 28.68% from the lows of the year. Out of the 50 stocks in the Nifty index, only 2 stocks (UPL Ltd and Adani Enterprises) gave negative returns for the year with the rest giving positive returns for the year. Out of the 50 stocks in the Nifty index, 18 stocks generated returns of more than 30% while 29 stocks generated of more than 20% in the year. 80% of the Nifty stocks gave double digit returns in the year.

Is there any trend in the best performing Nifty stocks by returns? Sectorally, auto and commodities have 3 representations each while IT surprisingly has two in the top 10. For a change, there are also 2 PSU stocks in this list, while Titan is the only FMCG company to figure in this list. Tata and L&T are the two business groups to have two representations each in the top 10 in terms of returns on the Nifty stocks in 2023.

NIFTY NEXT 50 – HOW DID THE NIFTY ASPIRANTS PERFORM?

The table below captures the best performing stocks in the Nifty Next 50 index (Nifty Aspirants). These are ranked on 1-year returns.

Generic Index	Closing Value	1-Year Returns	52 Week  Low Value	Bounce from 52-week Low
TRENT	3,006.15	123.54%	1,155.00	160.27%
ZOMATO	126.85	115.52%	44.35	186.02%
DLF	717.00	94.06%	336.50	113.08%
TVSMOTOR	2,014.05	92.86%	967.55	108.16%
BEL	180.70	79.75%	87.00	107.70%
CHOLAFIN	1,252.20	77.23%	658.00	90.30%
ABB	4,741.00	72.59%	2,640.00	79.58%
PNB	92.05	69.37%	44.40	107.32%
IOC	126.80	68.58%	72.35	75.26%
ZYDUSLIFE	688.00	64.24%	413.55	66.36%

Data Source: NSE / BSE

Here are some interesting takeaways on the Nifty Next 50. For the year, the index generated 25.01% returns and it bounced 42.96% from the lows of the year. Out of the 50 stocks in the Nifty Next 50 index, 11 stocks gave negative returns for the year with the rest giving positive returns for the year. The pressure came from Adani group stocks and specific names like Vedanta, Varun Beverages etc. Out of the 50 stocks in the Nifty index, 2 stocks (Trent and Zomato) more than doubled in 2023. A total of 25 stocks generated returns of more than 30% while 36 stocks gave double digit returns in the year.

The gainers are less theme specific and more stock specific. Zomato was largely on the back of the quick commerce story while DLF gained from the surge in demand for properties in NCR region. BEL gained from defence orders that came its way in line with the government focus on in-sourcing most of its routine defence needs. Ironically, the stock that showed the best bounce from the lows was Adani Green, which bounced more than 3-fold. However, due to the sharp fall post Hindenburg report, the stock still ended the year in the negative.

NIFTY MIDCAP 100 – HOW DID THE ALPHA STORIES PERFORM?

The table below captures the best performing stocks in the NIFTY MIDCAP 100 index. These are ranked on 1-year returns.

Generic Index	Closing Value	1-Year Returns	52 Week  Low Value	Bounce from 52-week Low
RECLTD	411.20	261.83%	108.00	280.74%
IRFC	96.75	201.25%	25.40	280.91%
MAZDOCK	2,340.00	185.04%	612.00	282.35%
PFC	385.20	181.90%	104.40	268.97%
RVNL	177.95	179.78%	56.05	217.48%
FACT	802.00	173.38%	192.00	317.71%
PRESTIGE	1,139.00	151.78%	391.00	191.30%
AUROPHARMA	1,070.00	142.16%	397.20	169.39%
BHEL	181.30	134.17%	66.30	173.45%
KPITTECH	1,522.00	117.78%	650.95	133.81%

Data Source: NSE / BSE

Here are some interesting takeaways on the Nifty Midcap 100. For the year, the index generated 45.63% returns and it bounced 56.02% from the lows of the year. Out of the 100 stocks in the NIFTY MIDCAP 100 index, 11 stocks gave negative returns for the year with the rest giving positive returns for the year. The pressure came from stocks like Aditya Birla Fashions and ACC (again an Adani group company). Out of the 100 stocks in the Nifty index, 11 stocks more than doubled in 2023. A total of 33 stocks generated returns of more than 50% while 55 stocks gave over 30% returns in the year.

If there is one theme that stands out among the big gainers in the mid-cap index in the year 2023 is concerned, it is about the PSU stocks. For instance, if you look at the top 10 stocks, then 8 out of these 10 stocks at PSUs and only 2 companies; Prestige Estates and Aurobindo Pharma, are from the private sector. The PSU list in the top 10 is spread across power finance, railway stocks, fertilizes and defence. The stock that saw the sharpest bounce of more than 4-fold from the lows of the year was FACT, again a PSU stock.

NIFTY SMALLCAP 100 – SMALL WAS TRULY BEAUTIFUL IN 2023

The table below captures the best performing stocks in the NIFTY SMALLCAP 100 index. These are ranked on 1-year returns.

Generic Index	Closing Value	1-Year Returns	52 Week  Low Value	Bounce from 52-week Low
BSE	2,259.00	321.42%	406.20	456.13%
APARINDS	5,850.00	238.91%	1,358.55	330.61%
NLCINDIA	253.15	203.93%	69.70	263.20%
ZENSARTECH	629.00	191.61%	202.75	210.23%
CYIENT	2,327.85	185.56%	780.70	198.17%
KALYANKJIL	354.70	183.99%	100.95	251.36%
JBMA	1,419.70	174.37%	449.40	215.91%
SJVN	92.75	168.11%	30.40	205.10%
ANGELONE	3,310.00	152.71%	999.00	231.33%
BSOFT	733.80	147.31%	250.25	193.23%

Data Source: NSE / BSE

Here are some interesting takeaways on the NIFTY SMALLCAP 100. For the year, the index generated 54.82% returns and it bounced 72% from the lows of the year. Out of the 100 stocks in the NIFTY SMALLCAP 100 index, 16 stocks gave negative returns for the year with the rest giving positive returns for the year. The pressure came from stocks where the story was more bottom-up and very stock specific. Out of the 100 stocks in the Smallcap index, 19 stocks more than doubled in 2023. A total of 45 stocks generated returns of more than 50% while 56 stocks gave over 30% returns in the year.

What are the key themes that come out of the gainers in the year 2023? In the small cap space, the gainers had three stories. There was the tech story, PSU story and the financialization of savings story. In terms of tech winners in the year, we had Zensar, Cyient and Birlasoft among the top gainers in the small cap index. On the PSU story, there was SJVN and NCL India (formerly Neyveli Lignite); both power sector plays. On the financialization of savings story, there was BSE Ltd and Angel One among the top gainers.

NIFTY MICROCAP 250 – BEST PERFORMING GENERIC INDEX

The table below captures the best performing stocks in the NIFTY MICROCAP 250 index. These are ranked on 1-year returns.

Generic Index	Closing Value	1-Year Returns	52 Week  Low Value	Bounce from 52-week Low
HBLPOWER	453.00	361.10%	86.15	425.83%
INOXWIND	471.00	331.19%	88.80	430.41%
ZENTEC	810.35	328.20%	177.75	355.89%
ANANDRATHI	2,570.00	269.77%	658.75	290.13%
JWL	323.15	262.01%	82.65	290.99%
CHENNPETRO	683.50	236.31%	186.60	266.29%
HSCL	308.50	227.78%	80.20	284.66%
MAHSEAMLES	943.00	216.04%	279.50	237.39%
NEULANDLAB	5,271.65	212.88%	1,318.10	299.94%
ANANTRAJ	296.55	201.38%	88.00	236.99%

Data Source: NSE / BSE

Here are some interesting takeaways on the NIFTY MICROCAP 250. For the year, the index generated 69.11% returns and it bounced 220.28% from the lows of the year. Out of the 250 stocks in the NIFTY MICROCAP 250 index, 30 stocks gave negative returns for the year with the rest giving positive returns. The pressure came from stocks where the story was more bottom-up and very stock specific. Out of the 250 stocks in the NIFTY MICROCAP 250 index, 64 stocks more than doubled in 2023. A total of 114 stocks generated returns of more than 50% while 144 stocks gave over 30% returns in the year.

What are the key themes that come out of the gainers in the year 2023? In the Microcap space, the game is just too stock-specific and bottom-up, so it is hard to decipher any sectoral theme in these gainers. Both, in terms of index returns and in terms of index bounce from the lows, it is the Nifty Microcap 250 index that has been the clear outperformer among the indices.

WHAT COULD BE THE INDEX STORY FOR YEAR 2024

It is hard to say at this point of time, what the index story could be. However, the broad expectation is that India could be at the start of a long term structural bull market. While intermediate correction will be there in the coming year, the undertone will be positive. After all, it is tough to bet against an economy that is moving from $3.5 trillion GDP to $5.1 trillion GDP in the next 7 years. Here are a few likely takeaways at an index level.

• With the market still likely to be a bottom-up market, we could see outperformance from the smaller indices compared to the larger indices. That was the trend in 2023 and will sustain in 2024 also.
• Big themes are likely to still be defence, IT and financialization of savings in the smaller indices. The focus would be more on capital goods and commodities in the large cap indices.
• If year 2023 was a year of wide intra-index variations, the year 2024 may see such wide variations. That would make selective indexation a worthwhile strategy for investors; both from an alpha perspective and also from a risk diversification perspective.