A stellar run by domestic equities in FY24 saw the market capitalization of 25 companies rise by atleast Rs 1 lakh crore in a year. Of this, 17 of them are part of benchmark Nifty 50.

The Nifty has gained nearly 29% in FY24 and it also tested a lifetime high after a muted show in FY23.

Robust corporate earnings, high capital investments by the government, strong domestic economic growth, and favourable monetary policy conditions were the key factors driving
the massive show on Dalal Street.

The unperturbed faith of retail investors, coupled with higher participation of both foreign investors and mutual funds led the strong performance and also drove the market capitalization.

The highest rise in the market capitalisation among index stocks was that of Reliance Industries. RIL’s market cap rose by Rs 4.4 lakh crore in FY24 to Rs 20.2 lakh crore, data by Ace Equity showed. The stock has gained over 28% during the year.

Larsen & Toubro, Tata Consultancy Services, Life Insurance Corporation of India and Bharti Airtel are the stocks that saw market capitalisation increase by more than Rs 2 lakh crore in FY24.

The country’s largest insurance major’s market cap increased by Rs 2.3 lakh crore to Rs 5.66 lakh crore, as the stock has gained a staggering 67% in FY24.

Apart from LIC, seven other public sector stocks join this list – State Bank of India, NTPC, Oil and Natural Gas Corp, Indian Oil Corp, Indian Railway Finance Corp, Hindustan Aeronautics, and Coal India.

While SBI’s market capitalization increased by Rs 1.88 lakh crore, those of IRFC went up by Rs 1.5 lakh crore. IRFC was one of the top performing PSU stocks, giving investors a handsome return of 437% in FY24.

Coal India, HAL, and IOC are the other three multibaggers in the PSU space, giving returns of 102-140% in FY24. HAL’s market capitalization increased by Rs 1.3 lakh crore to Rs 2.19 lakh crore.

But after a stupendous run in FY24, experts believe that incremental upside from hereon in many of the names will be unlikely.

“The phenomenal run of PSU stocks in FY24 might be nearing its peak. The initial surge could be attributed to factors like government reforms and pent-up demand, and as these normalize, so too might profitability growth for PSUs, leading to a potential correction in stock prices, as they adjust to reflect more sustainable long-term prospects,” said Sonam Srivastava of Wright Research.

She recommends focusing on PSUs with strong fundamentals and a clear path to sustainable profitability, which can help navigate potential volatility in this segment.

Despite underperforming compared to other largecap stocks, TCS’ market capitalization rose by Rs 2.15 lakh crore to Rs 13.9 lakh crore. The stock has gained 20% in the financial year.

Tata Motors was a star performer in FY24, as the stock gave multibagger returns of 133%. This saw its market capitalization rise by Rs 1.86 lakh crore to Rs 3.25 lakh crore.

After facing a massive hit in early 2023 by the explosive report of Hindenburg Research, Adani Group stocks rebounded sharply in FY24, and three firms saw market cap rise of over Rs 1 lakh crore.

Adani Enterprises, which gave 78% returns in FY24, saw market cap increase by Rs 1.56 lakh crore. Multibaggers Adani Ports and SEZ and Adani Green Energy saw their market cap go up by Rs 1.49 lakh crore each.

One other stock that not only made a comeback in FY24 but also became a multibagger was Zomato. Having given a staggering 252% returns to investors, the market cap of the online
food delivery aggregator increased by Rs 1.15 lakh crore.

Outlook FY25

After a stupendous run in FY24, most market experts believe that a similar performance may be difficult to repeat in FY25.

“FY24 turned out to be a good year for the markets, especially the broader markets. However, investors might need to tone down their expectations for FY25 as it could be a period of consolidation in the near term when earnings might start catching up with the slightly elevated valuations,” said Milind Muchhala, executive director, Julius Baer India.

Sujan Hajra, chief economist & executive director at Anand Rathi Shares and Stock Brokers also sounded cautiously optimistic about FY25.

“The potential commencement of a rate-cut cycle could provide additional momentum to market performance. However, investors should remain vigilant of macroeconomic indicators, corporate earnings growth, and market valuations as key determinants of market direction,” Hajra said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)