Soaring Indices Open New Opportunities

We are in the throes of witnessing a historic moment in the Indian stock market. Both Sensex and Nifty 50 have reached unprecedented highs, with Sensex breaching the psychological level of 70,000 and Nifty comfortably crossing the 21,000 mark. The last 2,000 points on Nifty were achieved within 111 trading days. Such fast movement was earlier recorded when Nifty 50 moved from 16,000 to 18,000 in a matter of just 47 days. This remarkable feat reflects the unwavering confidence that investors have in India’s economic growth story. 

For the second quarter of FY24, India’s GDP surged 7.6 per cent year-on-year, exceeding the consensus of even the most optimist economists and the Reserve Bank of India’s own assessment. The story behind the numbers is encouraging, driven mainly by investments and prudent fiscal spending. Investment rates soared to 32.9 per cent of the GDP, with corporate investments bouncing back by 3.3 per cent against the expectation of a decline. Given this strong growth and the controlled inflationary pressures, the government, I believe, will be able to meet its fiscal deficit target. 

Also, the recent state election results have provided a much-needed boost to investors’ sentiment and the market. The clear mandates given in most of the states to the current government at the centre have instilled confidence in the stability and predictability of the political landscape. This steadiness and consistency is crucial for attracting long-term investments and fostering economic development. The Reserve Bank of India’s recent decision to maintain a dovish stance on interest rates has further fuelled the market’s upward trajectory. 

Besides the domestic factors, globally too there are reasons that are helping the domestic market. Recently, the global bond market witnessed a significant decline in yields. This has made the equity markets, particularly those in emerging economies like India, more attractive to investors seeking higher returns. As global investors seek to diversify their portfolios, India’s burgeoning economy and strong fundamentals are attracting increasing attention. Foreign portfolio investors (FPIs) have finally reversed their selling streak, emerging as net buyers in the Indian stock market in December. 

FPIs were net sellers in August, September and October on account of a sharp spike in the US bond yields amid ongoing geopolitical tensions in the Middle East. The Indian stock market is experiencing a vibrant bull run, fuelled by a potent mix of positive factors. Supportive macro conditions, a weakening dollar index, favourable government policies and continued foreign investments are creating fertile ground for economic growth. To guide your investment decisions through this opportune time, we have conducted an in-depth analysis of the top 1,000 companies listed on the Indian exchanges.

This comprehensive study, covering over 90 per cent of the total market capitalisation, compares the financial performance of these companies from the first half of FY24 to FY23. Such a micro-level examination will help provide valuable insights into the Indian economy and guide you to identify the most promising sectors for investment. Complementing this analysis, our cover story highlights the recent performance of Adani Group’s stocks, offering a deeper understanding of its individual companies. This is to check if it makes sense to invest in them, especially after the recent rally. 

With the Indian economy in an upward spiral, the sector reports published in this issue identify not only the success stories but also focus on the challenges that some of these sectors face, while providing a future outlook on how they will fare in time to come. As we approach the year end, we wish you and your family a joyous Christmas filled with prosperity and happiness. We are sure that the spirit of giving will inspire you to invest wisely and contribute to the collective growth of the Indian economy. Compliments of the season and happy investing! 

RAJESH V PADODE
Managing Director & Editor