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3 years of Narendra Modi govt: In stock market, Eicher Motors returned most, HDFC Bank top wealth creator

As Narendra Modi-led NDA government completes its third year at the Centre, many analysts and industry experts alike are busy taking holistic view of how the country's growth performed during these years.

Not many of them would disagree on various conclusive growth-oriented steps being taken by the government in the past three years, the move has even caught investors fancy for stocks across the board on the country's much-famed Dalal Street as well.

Since the Narendra Modi-led BJP took charge in May 2014, the benchmark Sensex witnessed a roller-coaster ride after clocking record gains in the run-up to general elections.

Reuters

Reuters

However, over the past year or so, equity market has more or less seen a secular bull run on the back of robust foreign fund inflows and strong domestic investor participation, in a sense giving a thumbs up to the government's several reform initiatives and future plans to boost economic growth.

To give a perspective, the benchmark Sensex has risen a whopping 6,628 points, or 27.5 percent between 16 May, 2014 and 25 May, 2017, when the index closed at a record high at 30,750.03.

Not just that, the broader markets, too, showed exemplary performance on the bourses with the BSE Small-cap Index zooming 88 percent and BSE Mid-cap Index spurting 83 percent during the period under review.

Over past few quarters, several small-cap and mid-cap companies showed improved performance on the earnings chart, according to analysts, and with the government projecting a growth rate above 8 percent in the coming financial year, corporate earnings performance is estimated to be better in coming quarters.

Sectorally, the government's thrust to boost consumption-related activities has fuelled buoyancy in several consumer durables stocks. Over the past three years, the BSE Consumer Durable Index was the bigger gainer, zooming 103 percent, followed by Auto Index (up 65 percent), Bankex (up 55 percent) and BSE FMCG Index (up 41 percent), respectively.

Top sectoral gainers
Index 3 years ago index value Current index value % change
BSE Cons Durable 7478.42 15160.58 102.7
BSE Auto 14230.62 23496.70 65.1
Bankex 16994.36 26290.96 54.7
BSE FMCG Sector 6963.02 9841.86 41.3
BSE Healthcare 10322.94 13694.96 32.7
BSE Cap Goods 13482.14 17636.90 30.8
BSE Oil&Gas 11006.17 13912.67 26.4
BSE Realty Index 1605.57 1967.65 22.6
BSE IT Sector 8642.14 10368.73 20.0
BSE Tech 4866.42 5769.78 18.6

 

In comparison, the United Progressive Alliance-led Congress party in its first three years between 2004 to 2007 did a commendable job going by the index's performance on the bourses. Under the UPA 1 government, the Sensex posted a whopping 191 percent gains in the first three years on robust foreign fund inflows and a slew of economic reforms under the Manmohan Singh government.

However, the UPA 2 government failed to sustain the momentum as the Sensex returned just 15 percent gains between 2009 and 2012. It has to be remembered that during this period the global economy was going through a protracted slowdown after the Global Financial Crisis of 2008, with the European debt crisis looming large.

However, the good stock market performance under the current NDA government in the last three years has touched upon shares across various sectors.

Among the Nifty stocks, Eicher Motors stock vaulted 333 percent during the period under review while Maruti Suzuki flared up 219 percent as investors latched upon automobile stocks after falling interest rates, benign fuel prices and increased discretionary spending augured well for the industry.

Top Nifty gainers
Company 3 years ago price (Rs) Current price (Rs) % gain
Eicher Motors 6365.10 27589.35 333.4
Maruti Suzuki 2154.45 6880.30 219.4
Indiabulls Housing 334.75 1048.65 213.3
I O C L 163.20 424.05 159.8
Yes Bank 544.10 1401.60 157.6
B P C L 275.78 697.15 152.8
IndusInd Bank 562.05 1390.75 147.4
Bosch 10603.40 23042.75 117.3
Kotak Mahindra Bank 452.68 939.70 107.6
Asian Paints 536.40 1099.45 105.0
Source: CapitalinePlus

 

Further, Indiabulls Housing, Indian Oil Corp, YES Bank, BPCL and IndusInd Bank shot up between 147-213 percent.

Others such as Bosch, Kotak Mahindra Bank, Asian Paints, HDFC Bank, Zee Entertainment, UltraTech Cement, Grasim Industries, Hindustan Unilever and Aurobindo Pharma rose over 70-117 percent during the period under review.

Top wealth creators
Company 3 years ago market cap Current market cap Gain
HDFC Bank 193,212 402,344 209,132
Maruti Suzuki 65,082 207,840 142,758
I O C L 79,248 205,915 126,666
Kotak Mahindra Bank 69,745 178,828 109,083
H D F C 138,188 240,032 101,844
Hindustan Unilever 125,588 220,785 95,197
ITC 284,367 364,725 80,359
Reliance Inds 349,246 424,117 74,872
TCS 422,599 496,637 74,037
B P C L 39,881 100,820 60,938
Figures in Rs crore; Source: CapitalinePlus

 

Besides the frontline stocks, the biggest gainers were the stocks in the small-cap space.

Shares of Indo Count Industries, Caplin Point Lab, Minda Industries, Avanti Feeds, TVS Srichakra, Force Motors and Aegis Logistics zoomed 990-1,542 percent.

While bulls currently seem to be in no mood to cede ground to bears, all eyes will be on monsoon beginning next month and the likely rollout of the much-awaited Goods and Services tax on 1 July that will set the tone for the remaining part of the year.


Published Date: May 26, 2017 09:26 AM | Updated Date: May 26, 2017 13:24 PM

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