Indian equity market is hitting fresh highs on expectations of easing inflationary pressure due to a fall in crude oil prices and foreign fund inflows.
During intra-day trade on Monday, the S&P BSE Sensex index rose by 0.65 percent, or 407 points, to hit an all-time high of 62,701. The index finally closed with a gain of 211 points, or 0.34 percent, at 62,504.80. Similarly, the broader NSE Nifty marked a new record high of 18,614.25 during the trade.
According to Morgan Stanley, there is still room for the Sensex to rise. The brokerage sees a 50 percent chance of the Sensex hitting 68,500 by the end of next year, assuming that the effects of the Ukraine-Russia conflict do not spill over into 2023, domestic growth continues its strong path, and the United States does not slip into a protracted recession.
In the bull case scenario, the brokerage sees a 30 percent chance for the Sensex to hit 80,000 by December 2023, if the country is included in global bond indexes and prices of commodities such as oil and fertilisers drop sharply.
Meanwhile, in the past one year, ten Nifty50 stocks have outperformed the index with gains of over 25–125 percent.
Adani Enterprises stands at the top of the list in the Nifty50 index. In the last one year, the stock surged from ₹1,665 apiece to ₹3,886.15, generating a return of over 133.40 percent, which is 123.93 percent higher than the Nifty50 return of 9.47 percent during the same period.
Over the last three years, Adani Enterprises' stock delivered a whopping return of 1,723.63 percent, and the stock has risen 2,510.78 percent in the five-year period.
Gautam Adani has expanded empire aggressively in recent years by diversifying its business into multiple sectors. Overall, six out of seven Adani Group stocks have turned into multi-baggers in the last one-year period.
ITC emerged as the second top gainer in the Nifty50 index by delivering a return of 51.81 percent in the last one year, 42.34 percent higher than the benchmark's gains of 9.47 percent. Over the past few years, ITC has consistently underperformed in the markets, but this changed in 2022 after it surged by 56 percent to date.
The rally in ITC began in early March and since then, the stock has experienced a one-way spike by surging from ₹208.50 to ₹340.05 levels, delivering an extraordinary return of 63.09 percent in just eight months.
Coal India has risen from ₹154.25 apiece to ₹229.85, representing a return of 49 percent. The stock has outperformed the index by 39.53 percent.
The stock's bull run began when coal prices began to rise after the conflict between Russia and Ukraine erupted in February, benefiting coal India as domestic buyers rushed to buy coal from the company as international prices skyrocketed.
In terms of financial ratios, Coal India has one of the highest Return on equity (ROE) among Nifty50 companies. The company delivered an ROE of 40.23 percent in the year ending March 31, 2022. The 5-year average ROE and ROCE stood at 45 percent and 21.38 percent, respectively.
Shares of Mahindra & Mahindra were next on the list with a rally of 46.49 percent during the past one year, 37.02 percent higher than the Nifty50 gains.
From a low of ₹690.55 apiece in March 2022, the stock has soared to its current level of ₹1,250, producing a return of nearly 81.05 percent. The spike in the stock began in early June this year after the company reported a two-fold jump in its consolidated net profit to ₹2,237.4 crore in Q4 FY22.
On May 31, 2022, Mahindra and Mahindra crossed the ₹1,000 mark for the first time.
Other stocks, including NTPC, ICICI Bank, Axis Bank, IndusInd Bank, Eicher Motors and Sun Pharmaceutical Industries, also outperformed the Nifty50 by 24- 35 percent.
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