Out and underperformers: How NIFTY stocks fared in 2024

As we bid farewell to 2024, let's take a moment to reflect on the ups and downs of this year's stock market. We've seen impressive rallies and significant declines, with some stocks performing exceptionally well while others struggled. Let's review the best and worst performers of the year.

Nifty 50

Firstly, we will dive into the Nifty 50 stocks—the crème de la crème of the Indian stock market—to see who sparkled and who stumbled in 2024.

Top 5 best-performing stocks - Nifty50

Source: screener.in, Google Finance, Note: Data as of December 20, 2024

• Trent: Robust profit growth (84% in H1 FY25), strong network expansion (98 stores added in 2024), and collaborations with brands like Fitpage and Neckwreck, have all worked in the company’s favour.

• M&M saw all-around growth in 2024. SUV sales increased 21% YoY in H1 FY25. Overall tractor sales grew by ~10%, with exports growing by over 30% (YTD FY24, till November). Strong product launches like Thar ROXX and Pulsar NS400Z, which have been well received coupled with a favourable rural economy helped M&M achieve a strong year.

• Bharat Electronics saw a 41% increase in net profit. This rise was attributed to the Indian government's push for self-reliance in the defence industry and Bharat Electronics' role as a major supplier.

• Bharti Airtel grew its EBITDA by 6% YoY in H1 due to industry-wide tariff hikes, growth in mobile and broadband segments, along with strategic moves such as debt reduction. These factors lead the management to project EBITDA growth of 18-20% in FY25.

• Shriram Finance's success was due to strategic diversification in CVs and MSME loans, and the geographical expansion of ~1,500 additional branches. They also boast a strong financial position with 20% YoY profit growth. The "Shriram One" super app has also significantly benefited Shriram by enhancing customer experience, promoting digital adoption, and creating cross-selling opportunities.

Top 5 under-performing stocks - Nifty50

Source: screener.in, Google Finance, Note: Data as of December 20, 2024

• IndusInd Bank's share price decline was due to high slippages in its microfinance portfolio (₹398 Cr), reduced disbursements (38%), and increased provisions. Regulatory changes and concerns about asset quality and vehicle finance slowdown have also weighed on investor sentiment.

• Asian Paints faced challenges with muted demand and rising input costs, leading to a 7% decline in gross margins in H1 FY25 as compared to FY24. Margins are also expected to remain under pressure as new entrants have ramped up their promotional efforts through increased discounts.

• The decline in Hindustan Unilever's share price was due to muted volume growth of only 3% compared to market expectations of 5% and rising input costs leading to a drop in gross margins.

• In a year with gold prices up over 20%, Titan has underperformed due to higher input costs causing a margin decline of 1.4% in H1 FY25 as compared to last year, significant inventory losses from higher customs duties, and increased competition from local and regional jewellery players.

• Kotak Bank’s fall was due to the negative sentiment after RBI asked it to halt onboarding new customers or issue fresh credit cards, due to IT deficiencies and compliance issues. Additionally, increased credit costs from losses in the unsecured retail book specifically in their credit card business.

Nifty Midcap 100

Next, we will dive into the Nifty Midcap 100 stocks—the dynamic middleweights that often pack a punch, revealing some of the year’s winners and losers.

Top 5 best-performing stocks - Nifty Midcap 100

Source: screener.in, Google Finance, Note: Data as of December 20, 2024

• Oracle Financial Services Software saw a 30% YoY net profit growth in H1FY25 and won over 30 AI sales contracts. They also clinched important strategic partnerships with OpenAI and Google Cloud.

• Dixon reported over 12 million smartphones manufactured in H1FY25, a significant increase from 15 million phones manufactured in FY24. This was fuelled by partnerships with major brands like Motorola, Xiaomi, Oppo, and Transsion group, and expansion into new markets. They also plan to venture into IT hardware and components manufacturing, including displays and automotive displays.

• PB Fintech grew its health and life insurance business, with its total insurance premium nearing ₹20,000 crore in FY24 followed by ~₹9,000 crore in the first 2 quarters of FY25. Additionally, their PB Partners business is performing well, with 2.5 lakh advisors covering almost all Indian PIN codes.

• Rail Vikas shifted towards competitively bid projects, boosting turnover by almost ₹1,000 crore. The company also made strides in the international market (like the India-Middle East-Europe Economic Corridor), securing its first overseas project with a healthy profit margin of over 10%.

• Mazagon Dock thrived with an order book of over ₹40,000 crore. They recently completed field trials for the P75I submarine project with TKMS and are investing in capacity expansion, including ship repair services for the US Navy.

Top 5 under-performing stocks - Nifty Midcap 100

Source: screener.in, Google Finance, Note: Data as of December 20, 2024

• Bandhan Bank’s share price fell due to the RBI’s decision to raise risk weights for the emerging entrepreneurs business portfolio to 125%. This reduced Bandhan’s capital adequacy ratio by 362 basis points impacting its lending capacity.

• AU Small Finance’s asset quality has deteriorated due to elevated slippages in both secured and unsecured assets, with higher provisions in the microfinance portfolio impacting profitability. The bank's higher credit cost of 1.3% on its gross loan portfolio (GLP) added fuel to the fire.

• IDFC First Bank’s provisions jumped partly on account of higher delinquencies in its microfinance business and a ₹253 crore provision for a legacy toll road account. Its microfinance business is concentrated in Tamil Nadu which saw devastating floods adding to the delinquencies.

• Poonawalla Fincorp's profitability was hit due to challenges in its short-term personal loan book, leading to higher provisions and a one-time ₹666 crore provision. Weak distribution processes and rising NPAs, up by 20 basis points from the previous year, further add to asset quality concerns.

• TATA Technologies faced challenges due to a global slowdown in EV sales, with growth expected to slow to 31% in 2024 from 68% in 2023. This slowdown, driven by macroeconomic uncertainty and cautious customer sentiment, impacted growth in its core automotive segment.

Nifty Smallcap 250

Lastly, we will dive into the Nifty Smallcap 250 stocks—the territory where high risk and reward go hand-in-hand.

Top 5 best-performing stocks - Nifty Smallcap 250

Source: screener.in, Google Finance, Note: Data as of December 20, 2024

• GE Vernova saw an incredible 300% YoY increase in its order book driven by the rising demand for power transmission and distribution infrastructure in India.

• KFin Technologies secured major IPO mandates this year, including Hyundai and Bajaj Housing Finance. Its rapid growth in Southeast Asia, with new clients in Malaysia, the Philippines, and Thailand, also contributed to robust revenue growth.

• Motilal Oswal Finance shifted strategically from traditional broking to wealth management, responding to investor demand for personalized financial services, and priming MOFSL for sustained growth and client retention. Retail cash broking volumes surged 90% YoY. Additionally, private wealth AUMs grew 68% YoY to over ₹1.6 lakh crore.

• Anant Raj reported a 79% H1 FY25 growth in PAT, the company has also expanded its data centre business to 6 MW at Manesar. It has plans to reach 28 MW across Manesar and Panchkula by end-FY25.

• Godfrey Phillips India saw its cigarette volume rise by 31% in the second quarter driven by Marlboro brand along with a 20% growth in unmanufactured tobacco exports.

Top 5 under-performing stocks - Nifty Smallcap 250

Source: screener.in, Google Finance, Note: Data as of December 20, 2024

• Zee Entertainment saw a decline in advertising revenue due to weak demand and increased competition. Significant investments in content and their digital platform ZEE5, totalling ₹7,010 crore, have also weighed on the stock price.

• CreditAccess Grameen faced elevated delinquencies of 4.2% in FY25 as compared to 3.5% in FY24 in its microfinance portfolio. This was due to localised disruptions, customer liquidity constraints, and new industry guidelines, which raised concerns about asset quality and growth prospects, impacting the stock price.

• RBL Bank witnessed slippage in its microfinance (₹136 crores) and credit card (₹400 crores) portfolios, bringing up concerns about the bank's overall asset quality. Additionally, they witnessed a slowdown in deposit growth due to sequential degrowth in their CASA deposits.

• Ujjivan Small Finance Bank's share price decline is due to rising delinquencies in its microfinance portfolio. Credit costs have increased to 2.3%-2.5%, slower loan growth has impacted profitability, and heightened competition and rising interest rates have further pressured margins.

• Equitas Small Finance saw a rise in slippages in its microfinance portfolio, a 143% increase in FY25. Elevated credit costs, reaching 3.1% in H1 FY25 from 1.3% in H1 FY24, and slower disbursements, dropping to 20% of total disbursements in FY25 from 28% in FY24, hurt performance

What does this mean for investors?

As we step into 2025, investors should focus on well-researched opportunities, diversifying their portfolios, and staying informed about industry trends. Remember that while past performance may look enticing it is just one piece of the puzzle. Let's approach the new year with a focused investing strategy along with keeping an eye open for new opportunities.

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