The year 2022 has been a roller coaster ride for the Indian stock market. The year started on a strong foot but couldn’t hold the momentum as the global markets were affected by the declaration of war by Russia against Ukraine. In addition to that, fears of a recession in the US and a constant rate hike by the Fed kept the global markets under pressure.
However, as we approached the year’s end, the markets seemed to rally and made new highs. The nifty 50 index crossed the golden 18,800 mark for the first time in October while the BSE Sensex crossed the 63,000 level.
Here’s what analysts have to say about the top 4 sectors that gained the most in the year 2022:
The Automobile sector in India also picked up the pace in India after going through a slowdown for the last two years. The sector not only saw an increasing demand for Passenger vehicles but also a rapid improvement in the sales of Electric vehicles (EVs) in the country.
Nifty Auto, which constitutes the top auto companies in India, has jumped 1,668 points or 15% in the year 2022 from 11,114 to the current 12,605 levels. The top performers include TVS Motor Company Limited (YTD return of 72%), Tube Investments of India Ltd (YTD return of 47%), and Mahindra And Mahindra Ltd (YTD return of 51%).
“Segment-wise, for PVs, we now expect industry volume growth to slow down from ~25% in FY23F (~21% previously) to ~6/8% in FY24F/25F. However, those with higher exposure to EVs will continue to see strong operational performance,” said Nomura.
The sector saw a strong decline in volume growth due to inflation followed by increasing commodity prices. However, the companies were able to weather the storm and report a growth in sales and profits.
Nifty FMCG, an index that tracks the performance of the top FMCG companies in the country, started the year at 37,606 and gained 7,009 points or 18.65% during the year to be at 44,589 levels. The top performers of the sector are Varun
Beverages Ltd (YTD return of 125%), ITC Ltd (YTD return of 52%), and Britannia Industries Ltd (YTD return of 21%).
“We would expect consumer staples stocks to hold up better in the case of any meaningful market correction,” said Kotak Institutional Equities about the sector for 2023.
The Metal sector gained for the third straight year in 2022. The sectors saw a boost in exports, especially in the first half of the year when the largest importer of the product, China saw an ease in covid restrictions. In addition to that, the pullback of steel export duties and the decline in coking coal prices led to the rally.
The Nifty Metal index started the year at 5,628 levels and gained 1,094 points of 19.81% during the year to end near 6,615 levels. The top performers of the pack include Adani Enterprises Limited (YTD return of 121%), Jindal Steel & Power Ltd (YTD return of 50%), and Ratnamani Metals and Tubes Ltd (YTD return of 51%).
“Demand is expected to improve in the medium term with likely easing of covid policy and improvement in the real estate sector, backed by recent stimulus announced,” brokerage house JM Financial said.
The top performing sector in the year 2022 has been the banking sector, especially the Public Sector Banks. After a slowdown induced by the covid pandemic which continued for two years, the sector finally saw positive loan growth, higher Net Interest Margin (NIM), and an improvement in asset quality.
The Nifty PSU Bank index, which constitutes the Public Sector Banks, started the year at 2,584 levels. To date, the index has added 1,678 points or 66.32% to be at 4,208 levels. The top performers of the index have been UCO Bank (YTD return 136%), Bank Of Baroda (YTD return 116%), and Indian Bank (YTD return 95%).
The Bank Nifty started the year at 36,421 levels and further gained 7,346 points or 20.70% to be at 42,827 levels by the end of the year. The top performers of the index are the Bank Of Baroda (YTD return 116%), Federal Bank Ltd (YTD return 53%), and Punjab National Bank (YTD return 43%).
“We estimate an FY22-24 PAT (profit after tax) CAGR (compounded annual growth rate) of 8% for the PSU stocks having consensus estimates,” said a report by Motilal Oswal.
Written by Anoushka Roy
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