Retail investors’ unwavering faith, along with increased involvement from overseas investors and mutual funds, propelled the market capitalization and led to the robust performance.
After a lackluster performance in FY23, the Nifty increased by almost 29% in FY24 and reached a lifetime high.
“PSU stocks’ incredible surge in FY24 may be coming to an end. Pent-up demand and government reforms may have contributed to the initial surge in demand. As these factors normalize, PSU profitability growth may also, and stock prices may correct to reflect more sustainable long-term prospects, according to Wright Research’s Sonam Srivastava.
TCS’s market value increased to Rs 13.9 lakh crore from Rs 2.15 lakh crore, despite the company performing poorly in comparison to other largecap firms. The financial year has seen a 20% increase in the stock.
Tata Motors was a standout performance in FY24, with multibagger gains of 133% on the stock. As a result, its market value increased to Rs 3.25 lakh crore from Rs 1.86 lakh crore.
Following the devastating impact of the Hindenburg Research study in early 2023, Adani Group stocks had a strong recovery in FY24, with three companies witnessing a market valuation increase of more than Rs 1 lakh crore.
The market capitalization of Adani Enterprises, which generated 78% returns in FY24, increased by Rs 1.56 lakh crore. The market capitalization of multibaggers Adani Ports and SEZ as well as Adani Green Energy increased by Rs 1.49 lakh crore apiece.
Zomato was another stock that not only recovered in FY24 but also turned into a multibagger. After providing investors with an astounding 252% gain, the online meal delivery aggregator’s market value surged by Rs 1.15 lakh billion.
Forecast for FY25
The majority of market analysts think that it would be challenging to duplicate FY25’s incredible run after FY24.
The markets, particularly the larger markets, had a successful year in FY24. However, Milind Muchhala, executive director of Julius Baer India, stated that investors may need to lower their expectations for FY25 because there may be a period of consolidation in the near future during which earnings may begin to catch up with the slightly elevated values.
Anand Rathi Shares and Stock Brokers’ chief economist and executive director, Sujan Hajra, also expressed cautious optimism on FY25.
“The possible start of a cycle of rate reductions could provide the market’s performance more impetus. However, as important factors influencing market direction, investors should continue to monitor macroeconomic indicators, corporate earnings growth, and market values, according to Hajra.