Analyzing the Top 5 Stock Performance in 2023 and Their 2024 Market Dynamics

A Glance of Indian Stock Market in 2023

India's equity market capitalization has crossed the $4 trillion, securing the fourth position, after the United States, China, and Japan in the stock market rankings.

In the beginning of 2023, the Indian Stock Market underwent a 10% decline in its indices. But at the end of the year 2023, The Nifty has crossed over 20% (21731.40 points) and Sensex has crossed 19% (72240.26 points) to log their performance post covid. The factors like sustained domestic inflows, significant retail participation, return of FII buying, boosted macroeconomic growth and steady corporate earnings. The choice made by the US Federal Reserve to halt its interest rate hike path and its potential rate reductions in 2024 has greatly enhanced investor inclination from bonds to equities. Additionally, the decline in crucial commodities like crude oil prices has further bolstered market optimism. The small cap performed well by 56% and mid cap by 47% compared to large cap.

In this positive scenario of the Indian Stock Market in 2023, several stocks outperformed and delivered significant returns to investors. Here are some of the top-performing stocks that played a pivotal role in shaping the market narrative:

Top Performed Stocks in 2023

The stock price return percentage is not the only factor to identify the best performing stock. A stock must possess strong fundamentals like positive PE ratio, less Debt Equity ratio, positive ROCE etc. Also ,the stock price movement should be close to its 52-week high.

Here, Well performed stocks are determined using comparatively high PE ratio, with its stock price movement closer to 52 weeks high and sorted descending based on its return in the year 2023.

 

Top Performed Large Cap Stocks 2023

 

Top Performed Mid Cap Stocks 2023

 

Top Performed Small Cap Stocks 2023

 

Top Performed Nifty 500 Stocks 2023

 

Top Performed Nifty 50 Stocks 2023

The well performed Nifty 50 stocks infers that the manufacturing and Infrastructure sector were top performers in the year 2023. Going forward, the government focuses on Infrastructure development. The year 2024, would watch a strong performance in the Infrastructure sector.

Best Performed Stock Analysis

Tata Motors Ltd

The third most valuable company within the Tata Group has seen a remarkable 77% surge in 2023, positioning itself as the leading performer on the Nifty 50 index. This marks the stock's second-best annual performance since 2009, following a substantial 163% increase in shares during 2021.

In October, JLR (Jaguar Land Rover) recorded a noteworthy 14.1% year-on-year sales growth. The UK and the European Union witnessed substantial volume increases of 65% and 29%, respectively. Tata Motors' management has revised JLR's EBIT (Earnings Before Interest and Taxes) margin guidance for the fiscal year 2024, raising it from 6% to 8%. Moreover, they anticipate achieving a 10% EBIT margin by the fiscal year 2026.

JLR has successfully reduced its debt by £300 million and aims to further reduce net debt to £1 billion by the end of the fiscal year 2024. According to CLSA, the company is expected to transition to a net cash positive position by the fiscal year 2025.

Adding to Tata Motors' prominence is the ongoing Tata Technologies IPO, where the company, as a majority shareholder, plans to divest 4.62 crore shares. The stake sale, at the upper end of the price band, is anticipated to generate £2,310 crore.

Despite the commendable performance of Tata Motors, attention should be directed towards crucial aspects such as cash flows. The company's commitment to robust free cash flow is promising, and with current strong numbers, accumulation at these price levels is considered advisable.

It is expected that Tata Motors Ltd will have a bullish trend in 2024. The primary reasons behind the upgrade on Tata Motors was the better-than-expected margin and free-cash-flow (FCF) delivery at Jaguar Land Rover (JLR) and it is expected to cross Rs.900 

Larsen & Toubro Ltd

L&T recorded a remarkable 72% surge in order inflow during the July-September quarter of FY24, reaching Rs.89,153 crore. Notably, international orders contributed Rs.59,687 crore, accounting for 67% of the total order inflow. The infrastructure and engineering giant expressed confidence in surpassing its order inflow guidance and achieving robust revenue growth for the entire fiscal year.

The stock is currently valued at a core price-to-earnings multiple of 28 times and a core Enterprise Value to EBITDA multiple of 18.9 times. Projections indicate that the core order inflow is expected to reach Rs.2.7 lakh crore by the fiscal year 2026, surpassing the Lakshya target of Rs.2.3 lakh crore.

L&T's potential divestment from assets like Nabha Power and Hyderabad Metro is poised to enhance Return on Equity (ROE) to over 18% by the fiscal year 2026. In the July-September quarter of this year, the company reported an impressive 44.6% year-on-year increase in net profit, reaching Rs.3,222.6 crore, surpassing the estimated Rs.3,048 crore. Additionally, revenue witnessed a 19.3% year-on-year growth, reaching Rs.51,024 crore, closely aligning with the estimated Rs.50,210 crore.

Tata Consumer Products Ltd.

Tata Consumer Products Ltd. reported robust Q2 FY24 results with an 11% increase in Revenue from Operations to Rs.3,734 Crores. The six-month revenue reached Rs.7,475 Crores, up by 12%. EBITDA for the quarter surged by 30% to Rs.569 Crores, and for six months, it grew by 24% to Rs.1,116 Crores. Group Net Profit before exceptional items saw a notable 24% increase in the quarter, reaching Rs.375 Crores, and a 20% increase for six months to Rs.716 Crores.

In India, the Packaged Beverages business achieved 5% revenue and 3% volume growth. The Foods business recorded an impressive 16% revenue growth and 6% volume growth, driven by the value-added salt portfolio and Tata Sampann.

Internationally, the business experienced a 13% revenue growth in the quarter, with notable activities in the UK and the USA, such as the Tetley tea bag rollout and entry into the breakfast cereals category. The company emphasized its commitment to sustainability and achieving long-term targets by FY26, aligning with its transformation journey to become a premier FMCG company.

This January 2024, Tata Coffee Ltd and Tata Consumer Products Ltd stocks surged up to 4%, hitting fresh 52-week highs ahead of their merger on January 1.  Tata Consumer Products gained over 4%, reaching Rs.1,082.00, surpassing a market cap of Rs 1 lakh crore.

Tata Coffee, in a stock exchange filing, confirmed its merger with parent company Tata Consumer Products on January 1.  Tata Consumer Products rose 57% from its low of Rs.685.

Post these gains, Tata Consumer Products commands a valuation of around Rs.99,770 crore. Tata Consumer Products has become the sixth Tata Group firm with a market cap exceeding Rs.1 lakh crore.

Titan Company Ltd

In January 2024, the company announced its Q3 results. The Jewellery Division achieved around 21% YoY domestic growth, driven by double-digit buyer growth and a moderate increase in average selling prices. Notably, gold (plain) and coins outperformed studded sales during the festive quarter, reflecting heightened consumer interest in gold despite elevated prices and volatility. Strategic investments in exchange programs and consumer offers sustained growth. The Wedding segment contribution marginally improved YoY. Tanishq expanded internationally, adding two stores in the USA and one in Singapore, contributing to a c.102% YoY growth in primary outgo to these entities. In India, 34 new stores were added, with 18 in Tanishq and 16 in Mia.

In the Watches & Wearables Division, domestic business grew around 23% YoY, with approximately 18% revenue growth in Analog watches and a notable 64% growth in Wearables. The analog sub-segment's growth was driven by double-digit performances in Titan, Sonata, Helios, and international brands. Twenty-five new stores were added in the quarter, including 9 in Titan World, 11 in Helios, and 5 in Fastrack.

In the EyeCare Division, Revenue declined around 3% YoY, with two new Titan Eye+ stores in the GCC region and no net incremental additions during the quarter.

In Emerging Businesses, Taneira's Revenue grew approximately 61% YoY, opening 11 new stores. Fragrances & Fashion Accessories Revenue declined around 9% YoY, with Fragrances down by around 8% and Fashion Accessories witnessing a decline of approximately 10% YoY.

CaratLane Revenue grew around 31% YoY, with 16 new domestic stores added, expanding the network presence to 262 stores.

Apollo Hospitals Enterprise Limited

Apollo Hospitals Enterprise Limited has unveiled a Rs.3,435 crore capital expenditure plan to augment its existing capacity by adding 2,300 beds over the next three financial years. The funding for this expansion will be sourced from internal accruals and debt financing. This strategic move aligns with the company's objective to extend its presence in identified strategic locations, fostering sustained business growth and meeting the rising demand for high-quality healthcare services nationwide, as stated in a filing.

In its financial results for the September quarter, Apollo Hospitals reported a notable 14.2% year-on-year (YoY) increase in net profit, reaching Rs 233 crore for the period of July-September. The hospital chain exceeded expectations with revenue of Rs 4,846.9 crore, reflecting a robust 14% YoY growth. EBITDA (earnings before interest, taxes, depreciation, and amortization) for the quarter stood at Rs 627 crore, compared to Rs 565 crore in the corresponding period last year. The reported operating margin for the second quarter stood at 12.9%.

Subsequent to the earnings announcement, shares of Apollo Hospitals Enterprise Limited experienced a 4% surge, reaching Rs.5,312.50 on the NSE.

Conclusion

It is expected that the year 2024, will be of market volatility due to the interest rate cuts, valuation concerns and the most awaited general elections. It is anticipated that the new government will influence much on investor’s sentiment leading to market fluctuations.

Observing the leading gainers offers valuable insights into sector performance. Through extensive research, investors can pinpoint the patterns driving stocks with high returns, formulate their investment strategies, and leverage emerging trends.

Frequently Asked Questions

How was the performance of the Indian Stock Market in 2023?

India's stock market had a remarkable year in 2023, with market capitalization crossing $4 trillion, securing the fourth global position after the United States, China, and Japan.

What factors contributed to the market's performance in 2023?

Several factors, including sustained domestic inflows, significant retail participation, the return of FII buying, boosted macroeconomic growth, steady corporate earnings, and the US Federal Reserve's decision to pause rate hikes, played key roles.

How did Nifty and Sensex perform at the end of 2023?

The Nifty and Sensex showed substantial recovery, with Nifty crossing over 20% and Sensex crossing 19% at the end of 2023, reflecting post-COVID performance.

How to invest in well performed stocks?

Traders and investors can open a free demat account with Enrich Money who also provides insights on stocks movements.

What is the market outlook for 2024?

The year 2024 is expected to be volatile due to interest rate cuts, valuation concerns, and upcoming general elections, influencing investor sentiment and market fluctuations. Investors are advised to observe leading gainers for insights into sector performance.

 

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Disclaimer: This blog is dedicated exclusively for educational purposes. Please note that the securities and investments mentioned here are provided for informative purposes only and should not be construed as recommendations. Kindly ensure thorough research prior to making any investment decisions. Participation in the securities market carries inherent risks, and it's important to carefully review all associated documents before committing to investments. Please be aware that the attainment of investment objectives is not guaranteed. It's important to note that the past performance of securities and instruments does not reliably predict future performance.