Not just today, but since the last 1-2 years, both foreign and domestic investors are increasingly betting on the domestic growth story and the potential that India holds to become a global powerhouse.
A reflection of this can be seen in the performance of the S&P BSE Bharat 22 index, which has more than doubled in value in 3 years. In fact, the index hit a lifetime high of 6118.08 points on Friday.
At a time when the sword of a recession was hanging over developed economies such as the US and Europe, India became the fastest growing economy in the world.
The euphoria drove a whopping 28% rally in the Bharat 22 index on a year-to-date basis.
“India continues to be one of the fastest-growing major economies in the World for the 3rd year in a row. Investments are coming to India since international investors believe they can make better returns in India,” said Sanjay Chawla, CIO – Equity, Baroda BNP
Paribas Mutual Fund. Let’s take a glimpse of the performance of “BHARAT” stocks on Dalal Street.
Bharat Electronics: The electrical equipment maker’s stock has been one of the best performing in 2023, as it has given more than 43% returns. It has been a key beneficiary of the government’s initiatives to boost local manufacturing of defence equipment. Foreign portfolio investors raised their stake in the company by 93 basis points sequentially to 17.35% in the June quarter.
Hindustan Aeronautics – This is another public sector major that stole Dalal Street’s attention. The stock has given a whopping 62% returns to investors year-to-date. For eight consecutive quarters, FPIs have increased their holding in the company. They cumulatively
held 11.9% stake in HAL, compared to a mere 0.9% stake in June 2021.
Amara Raja Batteries: With the strong automobile demand and government’s thrust on electric vehicles, the company has been a key beneficiary. The stock has given about 15% returns year-to-date. FPI interest has also been high and they have steadily increased their holding. FPIs held 35.2% stake in the company as of June end.
REC Ltd – This is another PSU stock which has given superlative returns to investors, as it more than doubled in value in 2023, having gained a sharp 132%. The rising power consumption in India has driven the earnings and growth outlook for companies like REC. FPIs held 21.9% stake in the company as of June end.
ABB India – The capital goods company has been a key beneficiary of the recovery in private sector capex as well as government’s push to infrastructure and defence spending. The stock has given a whopping 66% returns to investors so far in 2023. For four straight quarters, FPIs have increased their stake in the company. They cumulatively held 9.5% stake as of June end.
Tata Motors – This has been one of the favourite stocks for Dalal Street investors in the automobile pack. The stock has given strong returns of 62% on a year-to-date basis. Strong demand for passenger vehicles in the domestic market, prospects of defence-related orders, and a recovery in the performance of arm JLR have driven the gains in the stock.
What should investors do?
Whether foreign or domestic money managers, all remain bullish on the India growth story and are, therefore, betting on domestic-oriented sectors.
For Raj Vyas of TejiMandi, real estate, automobiles, hotels, infrastructure, steel, cement are the sectors that are likely to do well in the near term.
The ongoing G20 Summit in Delhi has put the limelight on India and market participants see a lot of business potential emerging for the country at the summit.
“Hosting of the G20 event is indicative of the rising soft power of India and it comes with unprecedented economic opportunities,” said Ketaki Sharma, Founder & CEO, Algorithm Research.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
