Stock market analysis and stories by Swapnil Karkare

Articles by Swapnil Karkare

15 May 2025

A car running on flat tires: Pakistan's economy is struggling

India just had one those weeks that reminds me of the Lenin line: “There are decades where nothing happens, and weeks where decades happen.” A terrorist attack took two countries to the brink of full-blown war and back. The 2025 conflict between India and Pakistan was different, or “dangerously different” from previous ones, as The Economist put it.

An unanswered question remains — why would Pakistan, with its economy on a ventilator, enter a fight it simply couldn't afford? Forget regional experts. Even checking with ChatGPT first would have helped:

But this assumes that Pakistan's leaders are rational actors. It's no secret that its economy has been in a dire state for a while now, with high inflation and unemployment, falling GDP growth, soaring debt, and barely enough reserves to buy a few weeks of imports. The country has clung to the life-raft of international aid — just a day before the ceasefire, the IMF handed Pakistan a billion dollars.

We take a closer look at what's happening with our troubled neighbour.

Is the IMF hurting Pakistan?

The IMF’s bailout of Pakistan made headlines on May 9. It released $1.3 billion, the second tranche of its $7 billion package. The Russia-Ukraine war has spiked commodity prices and pushed Pakistan’s import bill through the roof. With enough money for just two weeks of imports, the Pakistan rupee tumbled, and inflation surged past 30%, sending the government into panic mode.

Many Indians were taken aback by IMF's willingness to give money to a country that has a long history of sheltering terrorists, from Osama Bin Laden to the Pahalgam attackers. But IMF has kept funding Pakistan to avert its bankruptcy and prevent regional chaos.

Pakistan has been in a never-ending loop of crisis and bailout, rinse and repeat. This is the 24th bailout of its economy since 1958. Economist William Easterly has noted that bailouts to bad governments usually delay reforms and worsen poverty. Imagine giving a gambler a bottomless wallet: when a country knows that help will keep coming, it has little incentive to fix its root problems.

The IMF must approve Pakistan’s FY26 (July ending) budget, scheduled in the first week of June, for it to go forward. Reports suggest that Pakistan is planning an 18% increase in defence spending. The fund’s bailout programme comes with conditions such as increasing tax revenue, and reducing wasteful expenditure. It will be interesting to see how the fund views this spending increase.

A grim comparison with India

On one side, we have a country that runs on bailouts. On the other side is India, which has not taken money from the IMF since 1991. Pakistan's economy is barely one-tenth the size of India's. India's foreign exchange reserves are nearly double Pakistan's GDP.

The comparison between the two neighbours paints a harsh picture:

A car running on flat tires? Pakistan has structural issues that need repair

High birth rates in Pakistan have led to a population boom, but it isn’t able to reap its benefits. For every 100 people working, 70 are dependents. This is a heavy load on family budgets, and has kept the national savings rate stubbornly low.

High GDP growth could have absorbed this pressure. But growth has been sluggish, and Pakistan's labour productivity ranks amongst the lowest globally. Years of ignoring education and healthcare have only made things worse.

Pakistan has to import essentials like fuel, machinery, edible oils, and fertilisers, which make up nearly 60% of its total imports. To keep them affordable, it needs to stop the rupee from falling. That means selling dollars from its reserves. But instead of earning those dollars through exports, it borrows them from institutions like the IMF. And when it’s time to repay, it resorts to more bailouts and relief programs.

Pakistan's stock market reflected the costs of escalation

Even if the IMF looked the other way, financial markets didn’t. The contrast was stark: relative calm in India, turmoil in Pakistan. That alone reflected the underlying difference in economic resilience.

Before Operation Sindoor, India had suspended the Indus Water Treaty, closed borders, and halted exports. Pakistan depends on the Indus basin for 80% of its farm water. Shashi Tharoor, a former Foreign Minister, said that Pakistan could run dry within four days in the event of a full-scale conflict. Moody’s also flagged that escalation could destabilise the economy and freeze foreign lending.

Between the Pahalgam attacks (April 22) and the ceasefire (May 9), Pakistan’s KSE-100 index dropped 13%, while India’s Nifty 50 stayed steady, up by 0.4%. On May 7, the day of Operation Sindoor, Indian markets opened lower – down by 0.6%, while KSE100 opened 6% lower. Post-ceasefire, both the markets rejoiced - Nifty 50 up by 3.8% from May 9, and KSE100 up by 13.3%, showing that the cost of conflict was simply too high for Pakistan.

Glimmers of hope

Indians shouldn't be rooting for Pakistan’s failure — a failed state tends to breed more terrorism, not less. The economy is very fragile right now, due to low productivity, poor human capital, and a dangerous dependence on imports and foreign lending.

With the help of the IMF, the Pakistani economy showed signs of revival in 2024, post-bailout. In March 2025, the fund noted, “Pakistan has made significant progress in restoring macroeconomic stability.” Prices and exchange rates were stabilising, interest rates softening.

Fitch upgraded Pakistan from CCC+ to B- while projecting a stable outlook. In December 2024, the government even launched a five-year economic blueprint, focused on enhancing exports, and digital transformation.

The vibes around Pakistan’s economy were getting better. Morgan Stanley listed it as an ‘unexpected winner’, as the KSE100 index gained 84% in 2024. Portfolio manager, Steven Quattry said, “You don’t have to stretch your imagination to make an investment case for Pakistan”. Investors like BlackRock, Eaton Vance Corporation, Legal & General, and Evli raised stakes in Pakistani companies.

Guns vs. Butter

So it is surprising that leaders acted the way they did amidst the country’s economic revival journey. Pakistan has risked losing not just manpower, infrastructure, and investors, but also long-term faith in its capability to revive itself.

Pakistan is a classic case of the ‘guns vs. butter’ dilemma. Every rupee spent on defence is a rupee not spent on education, healthcare, or food.

For example, in the late 1980s, Pakistan’s defence spending peaked at 7% of GDP. World Bank economist Parvez Hasan calculated that if just half of that had gone to development instead, Pakistan’s GDP growth from 1970 to 2010 could have been 2 percentage points higher, and the economy could’ve been twice its current size.

Frustration on the ground has been growing year after year. “They talk a lot, but we don’t see much change. It feels like they don’t understand what people are going through,” said a Pakistani student.Unless something dramatically changes, Pakistan’s economy will remain hostage to violence, underperformance and social instability - and a constant threat to India.

The Baseline

02 May 2025

Analysts predict the winners and losers in this results season

By Swapnil Karkare

It's been foggy days for Q4 results. The results so far aren’t giving us a clear, one-size-fits-all headline. Some sectors are riding strong on demand, while others are battling cost pressures, weak spending and project delays.

Analyst views are also all over the place. Crisil projects that overall revenue growth for Q4 will be flat at about 5-6%, but that profitability may improve. But Morgan Stanley expects a single-digit decline in profits, hitting a 19-quarter low due to weak revenues and falling margins.

This quarter matters more than most. It gives us an early sense of how India Inc. is preparing for FY26 in an uncertain global environment.

While results so far have been mixed, most results are still not out. So we decided to take a look at what institutional analysts are predicting, with the help of Forecaster. This tells us the numbers Nifty 500 companies are likely to see across revenues, earnings, margins, and capex in this quarter's results.

The indicators we use here are: Q4 estimated revenue growth (YoY%), Q4 estimated earnings per share growth (YoY%), expected change in EBITDA Margin from Q3FY25 to Q4FY25 (percentage points), and FY25 capex growth (YoY%).

Let's dive in!

Revenue winners and losers: Strong numbers look likely for some, with pockets of weaknesses

This quarter looks like a good one for consumer-focused and manufacturing companies. These businesses could see revenues go up from strong demand and new product lines, while infra, energy, and NBFC players grapple with regulatory issues, cost and execution headwinds.

Elara Securities expects consumer electronics companies to benefit from increased local manufacturing, and consumer durable firms to gain from festive demand. In real estate, top developers are likely to see growth from demand in major cities and premium launches, while smaller players face challenges.

Among individual companies, Inox Wind is forecast to deliver strong revenue growth thanks to robust sales of its new 3MW wind turbines. Suven Pharma is expected to benefit from rising CDMO (Contract Development and Manufacturing Organisation) demand and recent acquisitions like Cohance and NJ Bio.

In electronics, Dixon Technologies continues to be a star player, and should see higher revenues from increased mobile manufacturing, growth in its iSmartu brand, and strong refrigeration sales.

Sobha in real estate is likely to gain from over 20% higher bookings in Q4, while Bharat Dynamics in defence may grow with the execution of pending MRSAM (Medium Range Surface to Air Missile) orders.

On the other hand, NBFC revenues may drop due to weak demand, higher credit costs, and stress in microfinance, with net interest margins (NIMs) expected to shrink because of slow rate cuts.Aditya Birla Capital for example, could face topline pressure from regulatory tightening and weak credit growth.

The energy sector may face revenue pressure due to low crude price realisation and high LNG costs. Gujarat State Petronet may be hit by lower LNG production, costly imports and weak pipeline utilisation. Infra and industrial firms like KNR Constructions, PNC Infratech and Siemens see struggles ahead with project delays and a weaker government capex.

EPS (Earnings Per Share) winners and losers: Consumer players shine, while Energy and Auto are under pressure

HDFC Securities is expecting a profitable quarter for the retail, jewellery and durables sectors, driven by improved consumer sentiment, stable raw material costs and rising temperatures.

Sobha is set to benefit from strong bookings, while FSN E-Commerce (Nykaa)’s growing beauty segment and reduced fashion losses are expected to give its profits a boost.

Another potential winner is Sumitomo Chemical, which should gain from a favourable rabi season, solid exports, and stable costs.

Post its Gulf exit, healthcare company Aster DM Healthcare could improve profitability through cost optimisation and network expansion. Gujarat Fluorochemicals could benefit from industry tailwinds and recovering refrigerant gas prices.

On the flip side, Prestige Estates could see earnings pressure due to a high base and project delays. For Manappuram Finance, rising defaults in its microfinance book remain a concern. Meanwhile, Eternal's aggressive push to scale Blinkit might continue to weigh on profitability.

The revenue headwinds for PNC Infratechand Gujarat State Petronet mentioned earlier are also likely to spill over into its earnings.

At the sector level, consumer discretionary earnings are expected to rise, led by platforms like Swiggy and Nykaa, as well as jewellery firms gaining from elevated gold prices.

In contrast, EPS for the energy sector may fall due to weaker marketing margins and LPG under-recoveries. Similarly, auto could see muted earnings, with pressures from low operating leverage, intense passenger vehicle competition, and rising input costs, especially in natural rubber.

A margin squeeze comes for everyone

On the margin front, Q4FY25 is shaping up to be a challenging quarter, with a sequential decline expected across all sectors. Morgan Stanley writes, “Indian corporates' margins are likely to contract for the first time in two years.”

However, among the few companies that stand out, DLF could post margin gains from a larger share of high-margin, super-luxury residential projects and robust NRI demand. Balrampur Chini and Triveni Engineering in the sugar sector are also expected to expand margins, supported by higher sugar prices amid lower cane availability and increased ethanol diversion.

Natco Pharma could see better margins thanks to a favourable business mix between domestic and US markets, while Bharat Dynamics should benefit from strong revenue traction.

On the red side,Sun TV could suffer from slower FMCG ad spending and a soft theatrical release pipeline. Delays in delivering orders have likely dragged margins for Data Patterns, too. Kansai Nerolac might also see margin compression due to muted demand and intensified competition, while rising operating costs and fewer days in the quarter are expected to impact Airtel's margins.

Weaker government capex has compressed the margins of industrials like KNR Constructions. These two sectors - telecom and industrials - could report the highest sequential declines in margins this quarter.

Capex and private sector spending may finally see some pickup

On the capex front, FY25 is shaping up to be a year of strong private investment across sectors, even as government capex shows signs of slowing. The Ministry of Statistics highlights this trend, noting: “Despite challenges like weak demand, geopolitical tensions, and high borrowing costs, about 30% of firms plan to invest in upgradation in 2024–25, supporting the sharp increase in capex for that year. The slightly lower intended capex for 2025–26, though still above 2023–24 levels, reflects caution after a strong 2024–25”.

Leading the capex charts is the telecom sector, thanks mainly to Vodafone Idea. The company has rolled out a massive Rs. 50,000–55,000 crore investment plan over the next three years to upgrade its 4G and launch 5G services, out of which Rs. 10,000 crore is set to be spent in FY25 alone. Real estate is another sector making big investment moves, with Brigade and DLF leading the charge through expansion into new regions and a push to complete ongoing projects.

Among other sectors, IndiGo is focused on expanding its international footprint and upgrading its fleet, while Eternal's Blinkit wants to proliferate its dark stores and warehouses network.

However, a few companies are hitting the brakes. Inox Wind and Godrej Properties are expected to adopt a more conservative stance, focusing on executing existing projects, managing debt, and optimising cash flows. Similarly, Ramkrishna Forgings and Lemon Tree Hotels are looking to consolidate after recent expansion, while Bikaji Foods plans to prioritise higher utilisation of its current capacity before committing to new investments.

Across the board, most sectors are leaning toward higher capex in FY25, signalling growing confidence in the business cycle recovery and future demand prospects.

Some clear signals are emerging

Q4FY25 is expected to be a quarter of contrasts, with strong revenue momentum in consumer-facing sectors, but margin and earnings pressures for industries linked to energy and autos. On the upside, capex plans are ambitious across key sectors, pointing to long-term growth optimism.

The Baseline

02 Apr 2025

Former multibaggers: The top ten disappointments of FY25

By Swapnil Karkare

Ever jumped on a trend that didn’t last? It could be a fitness craze (the "five minute workout"), a fashion fad (low-rise jeans - thank god that's over), or even an app (is anyone still using Threads?).

Stocks work the same way. Some rally on hype, only to crash when reality kicks in. A winner today can easily become a loser tomorrow.

As we say goodbye to FY25, we look back at stocks that were multibaggers in FY24 but fell on their faces in FY25.

We used this screener, along with the screener rewind feature, to shortlist Nifty500 stocks that outperformed in FY24 but saw the highest declines (over 25%) in FY25. We focused on the top 10 by market capitalisation.

Here are the ten stocks that went from market darlings to big disappointments.

Let's take a closer look.

Tata Motors (Rose 147% in FY24, fell 32% in FY25)

For several quarters, Tata Motors rode a wave of positive media coverage, after launching its Nexon EV in 2020. In FY24 it achieved its highest-ever revenue, EBITDA and free cash flow. Operational efficiency was up, it was seeing strong demand for JLR and great India sales. It also reduced its net debt from Rs. 43,700 crore to Rs. 16,000 crore.

But the management predicted weakness in H1 FY25 due to dying pent-up demand, rising inventory, elections and the heatwave. Then came Emkay’s downgrade last year. Indian demand slowed, JLR revenue was flat in Europe and China as customers turned to Chinese cars.

Rising competition in India didn't help. Tata Motors saw a marginal revenue increase of just 1.6% YoY in 9MFY25. Trump’s announcement of 25% tariffs on automobiles has also put pressure on the stock.

CLSA is optimistic due to a potential JLR recovery, EV plans, attractive valuations, and a cyclical rebound in the CV segment. But competition looms from every side, and it's a rocky road.

Indian Overseas Bank (Rose by 184% in FY24, fell by 35% in FY25)

Between July and September 2023, Indian Overseas Bank (IOB) nearly doubled its stock price, marking its best quarter since 2001.

But in September 2024, Goldman Sachs downgraded bigwig PSU bank SBI, citing slower loan growth and rising credit costs, especially in MSME, agricultural, and unsecured portfolios. This sparked negative sentiment across PSU banks. And a broader market correction hit IOB hard.

Despite ongoing improvements in asset quality and margins, IOB’s high valuation, trading at a 2.7x price-to-book (PB) ratio, second only to HDFC Bank and Kotak Mahindra Bank at 2.9x, has deterred investors.

New India Assurance (Rose by 139% in FY24, fell by 32% in FY25)

According to HDFC Securities, RBI’s decision to raise risk weights for unsecured lending in 2023, led to a shift in investor interest from banks to insurance companies. Cheaper PSU insurers, some trading below their issue price, became more attractive.

New India Assurance is a market leader in general insurance, with around 45% of premiums coming from the health & personal accident sub-segment.

However, several catastrophic claims in FY24, rising competition from new-age players, and a muted H1FY25 have put the brakes on the company’s growth. Weak Q1FY25 results led FIIs and mutual funds to dump 13 PSU stocks, including New India Assurance.

Mangalore Refinery And Petrochemicals (Rose by 331% in FY24, fell by 38% in FY25)

Gross refining margins (GRMs) – the difference between the purchase and selling price of petroleum products - is a key growth driver for this oil & gas company. Higher margins mean better profitability for MRPL. Its turnaround between Q2FY23 and Q2FY24 saw MRPL's GRM jump from $-4.5 to $17.1 per barrel, as improved debt-to-equity ratio drove share price gains.

But narrowing discounts on Russian oil and falling petro-product prices as China demand weakened, have caused GRM estimates to fall. That led to a ‘Sell’ call from Motilal Oswal in January last year.

Then, in Q1FY25, MRPL's net profit declined by 93% YoY despite a 10% YoY increase in revenue. Since then, the stock has not recovered.

Ircon International (Rose by 314% in FY24, fell by 29% in FY25)

Government capex has turned railway stocks into multibaggers in recent years. Ircon’s stock had a good run for a few years thanks to strong fundamentals: Between FY18 and FY24, investors noticed as its revenue tripled from around Rs. 4,200 crore to over Rs. 12,800 crore.

The railway construction company was also diversifying into highway contracts and renewable energy, with highways accounting for 16% of operating income in FY24, up from 7% in FY22.

However, stock prices have declined recently due to surprisingly poor results. Domestic revenue fell 16% YoY while order books shrunk by 22% in Q4FY25 due to fewer orders, smaller project sizes, and intense competitive bidding.

According to Prashanth Tapse of Mehta Equities, weak earnings and steep valuations have triggered a sector-wide sell-off. Ircon director Ragini Advani said, “This is a cyclical area where we will need to survive. But growth may not be possible in this time.”

Cyient (Rose by 101% in FY24, fell by 37% in FY25)

Cyient’s share price rise in FY24 was driven by the AI boom, the resilience of Engineering Research and Development (ER&D) companies against macro challenges, a strong revival in the aerospace sector, and cheaper valuations relative to its peers.

Axis Securities recognised Cyient as a strong long-term ER&D player but downgraded it to ‘hold’ after Q1FY25 results, citing Digital, Engineering & Technology (DET) revenue decline, which makes up over two-thirds of its revenue. Motilal Oswal downgraded it to ‘Sell’ after Q3FY25 results, anticipating a weak Q4 and slower FY26 revenue growth.

Swan Energy (Rose by 220% in FY24, fell by 36% in FY25)

Swan Energy operates across sectors like Oil & Gas, Defense, Petrochemicals, Real Estate and Textiles. It acquired Veritas India, transforming it from a petrochemical trading company into a PVC and LPG processing company, and Reliance Naval & Engineering, boosting its defence and shipbuilding vertical.

Between FY22 and FY24, Swan's operating revenue surged 10x, turning losses of Rs. 158 crore into a Rs. 609 crore profit. Its stock price rose from Rs. 192 in April 2022 to Rs. 670 in March 2024, a 3.5x increase. In November 2023, Ventura predicted further growth due to Reliance Naval’s turnaround, Veritas’ transformation, and steady real estate rental income.

But that prediction didn't pan out. Results weakened over the next quarters. The company’s other income rose from Rs. 31 crore in Q2FY25 to Rs. 1,868 crore in Q3FY25, almost at the same level as its operating income due to the divestment of its LNG Floating Storage and Regasification Unit (FSRU). Its operating expenses have spiked almost 3X over the last two quarters. Rising operational expenses and inefficiencies have dragged down the stock in the last few months.

Jyothy Labs (Rose by 138% in FY24, fell by 25% in FY25)

This FMCG company has evolved from a single-brand, ‘Ujala’, to fabric care, dishwash, household insecticide, and personal care categories with brands like Henko, Pril and Exo. Its stock price zoomed 20% on 25th July 2023, the day it announced its Q1FY24 results. In that quarter, its sales grew by 15% YoY while its profits doubled.

The company was confident about its growth prospects in FY24 due to lower inflation and improving demand. These results especially surprised the market because overall FMCG sales for the quarter fell by 4-5% YoY, according to retail intelligence firm, Bizom.

Jyothy management changed its tune in the recent quarter, talking about subdued demand because of inflationary pressures and urban slowdown. It is also worried about margins, which fell from 19% in Q2FY25 to 16% in Q3FY25. For the past few quarters, its net profit growth has been slowing down. In the previous quarter, its operating profit contracted by 2% YoY and net profit by 4% YoY. Most segments have recorded declining operating margins.

Birlasoft (Rose by 195% in FY24, fell by 48% in FY25)

Leadership changes under Birlasoft CEO Angan Guha were aimed at bringing about stability and revenue growth. The company has long struggled with a low deal win-to-revenue conversion, and low annuity revenue.

But in August 2023, Nomura highlighted the company’s operational streamlining efforts and projected a 30% upside in stock price. The stock doubled in just six months.

In February 2024, however, the CEO expressed concerns about a weakening demand environment. Following this, the company reported a 2.7% QoQ revenue decline in constant currency terms in Q1FY25 as customers tightened their discretionary spending.

Its Q3FY25 results further disappointed investors with low growth and deal wins. “Revenue is likely to decline further in Q4 due to furlough extensions and client ramp-down. The weak exit rate, along with smaller sized deals, paints a dismal picture for FY26 as well," said Nuvama Institutional Equities.

Jammu & Kashmir Bank (Rose by 194% in FY24, fell by 31% in FY25)

The bank's share price witnessed a remarkable rise from around Rs. 36 in December 2021 to over Rs. 140 in March 2024, driven by a significant turnaround under the leadership of MD and CEO Baldev Prakash. Key factors included improvement in the state of affairs and economy of Jammu & Kashmir along with asset quality, with gross non-performing assets (GNPA) declining from 9.7% in FY21 to 4.1% in December 2024.

However, the stock has faced pressures due to muted growth in 9MFY25, impacted by elections and severe winter conditions. Advances growth has been sluggish during Q3FY25, with net advances growing only 7% YoY, and GNPA reaching 4.08% from 3.95% in Q2. Slower recoveries due to strain on borrowers' repayment capacities have further weighed on investor sentiment. Despite these challenges, the bank expects a substantial improvement in Q4.

You can find the related screener here.

The Baseline

20 Mar 2025

Are FIIs buying China and selling India? | Screener: Momentum stocks with high Forecaster price upsides

By Swapnil Karkare

A few months ago, Mililing was just another unremarkable village in China. After January 20 though, when DeepSeek released its R1 version, the place was suddenly on the map. Liang Wenfeng, the brain behind DeepSeek, turned out to be from this village.

Overnight, Mililing, with a population of just 700, became a tourist hotspot, with 10,000 tourists visiting daily during the spring holidays. Roads were widened, houses were painted, and new trees were planted. No one would have imagined that a young techie could boost tourism like that.

DeepSeek's impact has shown up in other ways. Investors have since flocked to buy Chinese tech companies through the Hong Kong Stock Exchange. To buy these shares, investors need Hong Kong dollars. The demand for the dollars rose so much that by February 18, banks ran low on cash. The Hong Kong Monetary Authority had to inject HK$5.5 billion in overnight lending - the biggest intervention in five years.

This rush into China seems to have come at India’s expense. FIIs have sold over Rs. 2 trillion in Indian stocks since October last year. The big question: is this just temporary or a sign of a bigger shift in global investor sentiment?

In this week's Analyticks,

Choices, choices: FIIs take another look at their India and China investments
Screener: Rising momentum stocks with high Forecaster target price upsides

Let's check in on this rivalry.

A twist in the story for Indian markets

India at the start of 2024, was all positive vibes. Corporates expected healthy profits, the IMF projected steady Indian GDP growth at 6.3% for both FY24 and FY25, and investors bet on policy continuity. Goldman Sachs even called India ‘the port of calm’ in a turbulent world.

China however, was struggling. GDP growth would fall from 5% in 2023 to 4.2% in 2024. Until mid-September 2024, markets agreed. India was the clear winner: Nifty 50 Index was up by 20%, while China’s SSE 50 Index had fallen by 5%.

But as the summer heat faded and we entered September, the mood changed. Worries about high valuations, and a consumption slowdown in India hit market sentiment. And China unveiled an economic stimulus package. Within ten days, China's SSE 50 Index was up by 29%.

In 2025, DeepSeek’s breakthrough pushed Chinese stocks higher, with foreign investors coming back in.

is the ‘Buy China, Sell India’ trend real?

Market experts have been talking about the ‘Buy China, Sell India’ trend this year — but it’s not new. In just the last 15 quarters, it’s played out four times. One example is June 2022, when FIIs pulled money from emerging markets but found value in beaten-down Chinese stocks, especially as Shanghai reopened after long lockdowns.

But the battle is not necessarily India vs. China. In 8 of the last 15 quarters, investors have either bought both or sold both. Perhaps it's a lack of imagination that drives investors to pit India and China against each other, as if it's always the dragon or the elephant, not both.

Global sentiment and country-specific triggers matter more than simple either/or choices. And Charlie Dutton from Manulife has a contrarian viewpoint. He believes domestic Chinese investors drove this most recent rally, not FIIs. Unfortunately, we cannot verify this as China does not update FII data regularly.

Valuations don’t matter…until they do

Why have FIIs been pulling out of Indian markets in recent weeks? The biggest reason is valuation. India’s stock market capitalisation was around 1.3 times its GDP in 2024 (now down to 1.2x), while it was close to 0.7x in China, making it a more attractive market for many investors.

For value-focused funds, India is a tough fit right now. Take GMO’s value fund, for example. Arjun Divecha, Partner at GMO, said, “We're very underweight in India - close to zero - because of the valuation."

Rising US bond yields and a stronger dollar have also played their part. When safer assets like US bonds and dollars become more attractive, emerging markets like India take a hit.

Is the government stimulus enough for China?

The China stimulus has caught attention, but the results are still unclear. The government cut policy rates by 50 basis points, encouraged property purchases, announced childcare subsidies, increased wages, and subsidised the replacement of old home appliances, automobiles, and electronics with newer, energy-efficient models, among other things.

The focus is enticing people to buy more. But the response has been lukewarm.

Retail sales growth slowed from 7.2% YoY in 2023 to 3.5% YoY in 2024. Demand is so weak that consumer inflation turned negative in February — a clear sign of deflation and fading consumer confidence. To keep things moving, the government has raised its fiscal deficit target to 4% for 2025, up from 3% in 2024. But it's not certain if these measures will revive demand and hit the 5% GDP target.

The wind is on India's back

While domestic measures are underway, China is also under pressure from shifting global trade patterns, especially ‘China+1’. It won’t happen overnight, but the signs are already visible. For instance, the share of Chinese products in US imports has fallen from 22% to 11% in six years, creating opportunities for countries like Vietnam, Thailand, and India, according to investment firm GMO.

China, on the other hand, is setting up factories in other countries to bypass tariffs and remain the world's go-to supplier. At the same time, it doesn’t want to pass the baton to India. Recent reports show that China is also blocking its companies from investing in India, limiting the flow of Chinese workers and equipment to India, and limiting exports of key materials — all to put roadblocks in India's manufacturing growth.

Here, China may be fighting the inevitable. When we look at the long term, India is much better positioned. A young population, a growing domestic market, political stability, and deepening global partnerships work in its favour. In contrast, China faces structural weakness — a shrinking, ageing population, heavy dependence on exports and state-owned enterprises, an opaque, non-democratic system, and growing geopolitical tensions that risk isolating it from the West.

Franklin Templeton’s Brian Freiwald highlights that India’s consistent GDP growth and market returns over the past two decades offer a better broad-based opportunity than China, which still needs careful stock picking. He also pointed out that with global portfolios still underweight on Indian equities, there’s room for significant capital inflows once valuations stabilise. Charlie Dutton from Manulife expects FII interest in India to return in the second half of 2025.

So the long-term story is intact. As Howard Marks said, ‘You don’t want to miss out on India in the next 10 years.”

Screener: Rising momentum stocks with high Forecaster 12-month target price upside

Top Forecaster picks with momentum: High growth potential stocks

With the Indian market seeing a gradual recovery over the past week, we look at stocks with the highest target price upside potential over the next year, which are seeing an uptick in momentum. This screener shows stocks with an MoM improvement in Trendlyne Momentum scores and high Forecaster estimates 12-month upside %.

The screener consists of stocks from the aluminium & aluminium products, commodity chemicals, healthcare facilities, housing finance, and iron & steel products industries. Major stocks that feature in the screener are Lloyds Metals & Energy, Aadhar Housing Finance, Deepak Fertilisers & Petrochemicals Corp, Coforge, Minda Corp, Krishna Institute of Medical Sciences, Bharti Hexacom, and Hitachi Energy India.

Lloyds Metals & Energy shows up in the screener as Forecaster estimates a 40% target price upside over the next year. This coal & mining stock’s Trendlyne momentum score increased by 5.2 points MoM to 57.9. Analysts at ICICI Securities expect the company’s top line to improve on the back of the expansion of its steel plant, while the acquisition of Thriveni Earthmovers is expected to improve margins. They expect the firm’s revenue and EBITDA to grow at a CAGR of 49% and 59% over FY25-27.

Deepak Fertilisers’ Trendlyne momentum score jumped by 17.8 points MoM to 61.1. Trendlyne’s Forecaster expects this commodity chemicals company’s stock price to grow by 28.3% over the next year. Analysts at Keynote Capital believe the firm’s expansion of the technical ammonium nitrate (TAN), weak nitric acid (WNA), and concentrated nitric acid (CNA) capacities, to be completed by H2FY26, will help in revenue growth. They expect its revenue to grow at a CAGR of 13% over FY25-26.

You can find some popular screeners here.

The Baseline

12 Feb 2025

The missing piece in India's growth | Screener: Exporters outperforming the Nifty

By Swapnil Karkare

It’s February, and summer has officially hit Mumbai. Not that it's ever cold here - I have a drawer full of sweaters that I barely use. Sometimes in December I see a fellow Mumbaiker optimistically wearing their underused woolens, but let's not fool ourselves.

On the bright side, as the days warm up, I can finally indulge in ice cream. Chocolate’s my go-to flavour. But the tough part is deciding between choco chips and Belgian dark chocolate.

But why do I have to choose, really? It doesn't have to be 'either-or'; it can be 'and'. That’s what Minister Ashwini Vaishnaw has been saying for India’s growth path: not manufacturing or services, but both. Multiple paths can rapidly grow India's GDP, just as multiple ice-cream scoops can grow my waistline.

Bloomberg estimates that India can be the GDP growth leader globally by 2028, the way China used to be in the past two decades. WEF President Børge Brende expects India to contribute to 20% of global growth in the coming years, from 15% currently.

In this week's Analyticks,

Recipe for growth: India is still missing key pieces as we try to boost the economy

Screener: Exporters outperforming Nifty with growth in revenue and profit

India's recipe for growth is missing high-end manufacturing

A country's growth usually comes with rising complexity. Countries start with simple, low-cost products like clothes, shoes, and commodities. Then they move up to high-tech goods like electronics, electric cars and aircraft, plus advanced services like chip designing, R&D, and AI. They build on their capabilities over time, to move into specialized sectors.

A good example of how this complexity works is Finland's growth path. Finland historically had a lot of tree cover, so over time they became good at building machines that cut trees. Finnish manufacturers soon developed automated cutting machines, and then became better at making automated machines across different industries. That skill over time, led to Nokia.

The first Nokia factory was originally a wood pulp plant.

Similarly China moved from making cheap toys and electronics to becoming a leader in electric cars. South Korea became a global electronics giant, while India’s IT sector grew from call centres to a global tech powerhouse.

To understand this better, economists use something called the Revealed Comparative Advantage (RCA) index — a fancy way of saying, “What has a country become really good at making and exporting?” If the score for a product is greater than 1, it means the country exports more of that product than the world average, indicating a comparative advantage, and vice versa.

Where does China score high in 'comparative advantage'?

By 1999, China already had a strong manufacturing base, excelling in primary (food, beverages, and minerals), low-tech (leather, textile, glassware, furniture, and jewellery) and high-tech products (advanced machines, pharma products and radioactive materials). By 2023, it had shifted from low-value sectors and now dominates high-tech industries.

India's move from low to medium specialization

Two decades ago, India had a competitive edge in primary, resource-based (food processing, rubber, wood, and cement), and low-tech industries. In 2023, its scores for these sectors have declined, but remain above 1. But India is getting better at producing medium (auto and auto componenets, synthetic fibers, and appliances) and high-tech products. But scores for the higher-end sectors are still below 1 - we are lagging the global average here.

The trend shows that India is still great at making things like clothes, shoes, and toys. But we haven't yet moved into more advanced manufacturing like electronics and biotechnology.

Electronics: From importer to exporter

Not long ago, India relied on imports for most electronics. Today, it’s becoming an export leader in this space. Electronics exports jumped from $4.5 billion in FY15 to $28.5 billion in FY24 – a stunning 23% CAGR. The secret sauce? A blend of tax cuts, production incentives, and capital support.

Last year, India registered a 40% increase in mobile phone exports, while China and Vietnam saw declines. India captured nearly 50% of China and Vietnam’s lost mobile exports — a sign of its growing dominance.

The smartphone production-linked incentive (PLI) scheme played an important role. Giants like Apple, Xiaomi, and Samsung ramped up production in India, with Apple doubling its exports from India. Today, iPhones make up 65% of India’s mobile exports. Dixon Technologies, a key player in PLI, expanded its workforce from 9,000 before the pandemic to 26,000 today, manufacturing products for Motorola, HP, Lenovo, LG, and more.

“What we’re used to seeing in China is these large mega factories, where thousands of people are working on one campus and live on that campus; we are also trying to do that in India”, says Sunil Vachani, Dixon’s chairman.

So India has entered the electronics manufacturing space -- but we have yet to move up the value chain, from assembly to design.

India’s rise in global pharma

India is the world's largest vaccine maker, producing 60% of global vaccines, and is making waves in biotech research and development. A few companies are leading this front. Zydus for instance, has beat global giants like Novartis and Roche in testing NLP3R inhibitors for amyotrophic lateral sclerosis (ALS) disease. Glenmark’s ISB 2001, a blood cancer drug, could be a cheaper alternative to J&J’s Darzalex, if approved.

The government has targeted making this a $300 billion industry by 2030 from $130 billion today, through policies like the PLI, National Biotechnology Development Strategy 2020-2025 and the Bio-E3.

But there’s also a political angle to this story.

The US Biosecure Act, which aims to ban federal agencies from purchasing Chinese drugs, is awaiting a decision from the Trump administration. Even though the Act hasn't yet passed the Senate, global companies are already moving their supply chains away from China. This shift presents a significant opportunity for Indian pharmaceutical companies, which already provide 40-50% of generic drugs in the US.

Not every industry is a winner

The Indian government has been building support for many promising industries. But today’s factories are quite different from those in the ‘80s and ‘90s. They have more automated machines and robots. The Economist notes that this makes it harder for poor countries to compete in manufacturing. It also makes it harder for governments to know which industries to help.

When venturing into new sectors where it lacks experience, India must start small and choose carefully the areas it builds expertise in. Some may not pay off at all. Take semiconductors, for example. India has ambitious manufacturing plans, but most proposed facilities will only assemble chips (low value), not design them (high value). It is also a late entrant to a semiconductor space where many countries are jockeying for supremacy.

The manufacturing+services strategy gets a boost from GCCs

The good news? India’s services sector is evolving alongside its manufacturing efforts.India is no longer housing just basic call centres; it's becoming a global hub for Global Capability Centers (GCCs). GCCs work as overseas offices of big companies. They handle tasks like tech development, research, and customer service.

India is home to 1,700 GCCs, 17% of the global total. This number could rise to 2,200+ in the next few years. Consulting firm Zinnov’s CEO Pari Natarajan, calls Indian GCCs "the nerve centres of global tech advancement".

GCCs earned over $64 billion in FY24, up from $46 billion in FY23. They are creating a wealth of high-paying, specialised jobs and could generate over 4 lakh jobs this year. Companies are even tapping into smaller cities like Visakhapatnam, Coimbatore, Jaipur, Vadodara, Kochi, and Chandigarh to find talent.

India faces the difficult challenge of finding jobs quickly for millions of low-skilled and high-skilled workers, which can only be answered with a manufacturing and services combo. The one advantage India has in a difficult global environment of tariffs and competition, is hostility in the US and EU to a rising China. Politics+economics, combined with manufacturing+services, may be India's real advantage in the coming years.

Screener: Exporters outperforming the Nifty with growth in revenue and profit

Auto & chemical stocks outperform Nifty 50 after strong profit growth in Q3FY25

As we near the end of the results season, we look at exporters with the best performance in Q3FY25. This screener shows stocks outperforming the Nifty 50 in month change with YoY growth in revenue and net profit.

The screener is dominated by stocks from the chemicals & petrochemicals, automobiles & auto components, pharmaceuticals & biotechnology, and textiles apparels & accessories sectors. Major stocks that feature in the screener are UPL, Maruti Suzuki, TVS Motor, Sumitomo Chemical India, Divi’s Laboratories, Epigral, Garware Technical Fibres, and Mahindra & Mahindra.

UPL surged by 11.3% over the past month, outperforming the Nifty 50 index by 12.8 percentage points after its net profit and revenue grew by 168% YoY and 10.3% YoY, respectively, in Q3FY25. This helped the agrochemicals company’s net profit and revenue to beat Forecaster estimates by 138.8% and 1.2%, respectively. Net profit surged on the back of lower raw materials, finance, and exchange differences on trade receivables. On the other hand, sales growth and rising prices of its products helped the company’s revenue increase.

Maruti Suzuki also shows up in the screener after its price rose 9.4% over the past month, outperforming the Nifty 50 by 11 percentage points. This comes in response to the cars & utility vehicles manufacturer’s net profit and revenue growing by 16.2% YoY and 15.4% YoY during Q3FY25, helping to surpass Forecaster estimates by 2.1% and 2.9%, respectively. A reduction in inventory costs and a deferred tax return during the quarter helped profit increase, while a recovery in sales in the rural market helped with revenue growth.

You can find some popular screeners here.

Signing off this week,

The Trendlyne Team

The Baseline

30 Jan 2025

RBI tries to not drop the icecream | Screener: Stocks with FIIs and MFs increasing shareholding

By Swapnil Karkare

India's current Central Bank problem is a bit like the challenge Indian kids face. Indian parents want you to be all three things at once - super smart, good-looking, and socially savvy, ready to jump up and make conversation when neighbour aunty drops in.

This trinity of skills is of course, near-impossible to achieve (although said parents will always claim that some distant cousin possesses all three).

Central banks face a similar problem. They have three goals —keep the currency stable, allow free flow of money across borders, and set interest rates to suit the country’s needs. But they can’t achieve all three at once. Economists call this the ‘impossible trinity.’

India's RBI has historically focused on free money flows and controlling interest rates, while not trying to stabilize the rupee. But in recent years under Shaktikanta Das, it changed course, and worked hard to keep the rupee’s value stable.

To do this, the central bank sold dollars and bought rupees, which reduced rupee availabilty and artificially boosted its value. As a result, money flow tightened, even as GDP growth slowed.

Now, it looks like the RBI is shifting focus back to rupee liquidity, instead of controlling the currency's value. It announced this week that it will inject Rs. 600 billion ($18 billion) into the economy to address the worst cash crunch in a decade.

Like Indian kids, the RBI must make some hard choices. And it has apparently decided to stop trying to control the value of the rupee, and let it depreciate.

In this week's Analyticks:

A tightrope walk for RBI: Under the new RBI governor, the Central Bank is making different choices
Screener: Stocks where foreign investors and mutual funds have increased their stake

A strong dollar is a challenge for emerging markets

The US economy post-Covid has been stronger than other developed markets, with solid economic growth and low unemployment.But its interest rates have stayed high due to inflation.

High rates have drawn global investors, who are piling money into US assets. The dollar as a result has strengthened steadily in the last few years.

A strong dollar has been tough on emerging markets

Over the past year, emerging market (EM) currencies took a huge hit. The Egyptian Pound lost more than half its value over the last year. Latin American countries such as Mexico, Argentina, and Brazil saw their currencies depreciate 18-30%, while Polish, Thai and Vietnamese currencies depreciated the least (<2%). Following Trump's victory, EM currencies fell by an average of 2-4%.

When currencies depreciate, imports such as fuel, get expensive, straining budgets. As these countries slip into the red, foreign investors lose confidence and start selling their investments. This further weakens these currencies.

The RBI kept battling a strong dollar

Former Chief Economic Advisor Arvind Subramanian, Josh Felman, and Abhishek Anand say that the RBI changed how it managed the rupee in the last two years. The data for the Real Effective Exchange Rate (REER) Index, a measure of the rupee’s intrinsic value, showed that before 2022, the rupee moved a lot due to events like the global financial crisis (2008), the taper tantrum (2013), and crises in Turkey and the IL&FS default (2018).

But since 2022, the rupee became very stable. They compare this stability to the flat cricket pitch at the Melbourne Cricket Ground. This suggests that the RBI has kept the rupee steady, almost pegging it to the US dollar.

In 2025, 2013 still haunts policymakers

Whenever EM currencies take a hit, the scars of the 2013 ‘Taper Tantrum’ resurface for policymakers.

After the 2008 global financial crisis, the US Fed started buying government and corporate bonds through a program called quantitative easing (QE). The objective was simple: By buying bonds, money would flow into the system and lower interest rates.

In May 2013, then-Fed Chairman Ben Bernanke announced that the Fed might reduce its bond purchases sooner than expected due to improving economic conditions. This meant that the dollar would likely strengthen, and US interest rates would rise.

The dollar didn't surge, but EM currencies depreciated sharply. Countries like Brazil, India, Indonesia, South Africa, and Turkey, known at the time as the ‘Fragile Five’, saw their currencies drop by over 10% in just four months. The Fragile Five had high current account deficits (spending more on imports than they earned from exports) and heavy reliance on foreign investments.

The Indian rupee was hit the hardest, depreciating by 22%, worsening the current account deficit, pushing inflation to double digits, and slowing economic growth.

But EMs, including India, took this as a wake-up call. Today, they are better prepared, as highlighted by Nomura.

Emerging Markets rise to the dollar challenge

The past few months have been challenging for many EM central banks, but they've acted quickly. Indonesia and Malaysia for example, asked commodity and state firms to bring overseas earnings back into their countries to boost their currencies. South Korea sold won debt for the first time in 21 years to defend its currency and increase forex reserves. China limited yuan lending in Hong Kong to support its value. Brazil's central bank intervened by selling $21.57 billion in the spot market in December, along with currency swaps and spot auctions. It's hard to say for sure, but there's hope that these measures could help steady these economies.

And what is the RBI doing?

Back home, RBI sold a record $81 billion from its reserves since October 2024 as it worked to keep the value of the Indian rupee up. India’s forex reserves stood at $705 billion on September 27, but is now down to $624 billion.

Since December, the RBI started course-correcting. To address the rising cash crunch in the economy, it cut the cash reserve ratio (CRR) by 50 basis points to allow banks to lend more, and has conducted variable rate repo (VRR) auctions so that banks can borrow more funds from the RBI.

These measures will pour more money into the system. And when there’s more cash in the system, banks are more willing to offer loans at lower rates. Analysts also believe that this liquidity push means that RBI is getting ready to cut the interest rate.

2025 is a different story from 2013

Now that RBI has stopped defending the rupee, the market will likely decide the rupee's value. The rupee could fall as far as 90-95 against the dollar, according to analysts.

While a falling rupee may make imports more expensive and raise inflation, its a challenge the central bank can handle. Fortunately, India is far healthier in 2025 compared to 2013.

Screener: Stocks where foreign investors and mutual funds have increased their stake

FIIs and MFs increase their holdings in banks and NBFCs

As the shareholding data for Q3FY25 comes in, we look at stocks where foreign institutional investors (FIIs) and mutual funds (MFs) bought the most stakes. This screener shows stocks with the highest FII and MF holding increases in the latest quarter.

The screener is dominated by stocks from the banking, capital markets, IT consulting & software, and auto parts & equipment industries. Major stocks featured in the screener are Home First Finance, IDFC First Bank, GE Vernova T&D India, PNB Housing Finance, BSE, Godrej Properties, DOMS Industries, and Amber Enterprises.

Home First Finance features in the screener with the highest QoQ growth of 12.3 percentage points in FII holding in Q3FY25, while its MF holding increased by 4.9 percentage points QoQ. This comes after the housing finance company’s promoters, Aether (Mauritius) and True North Fund V LLP, sold a combined 9% stake in the company through the open market in December 2024. Home First's stock price has declined 1.2% over the past year.

Notable FIIs that bought the sold shares are Smallcap World Fund Inc (bought a 2.9% stake), Government Pension Fund Global (bought a 2.6% stake), and Goldman Sachs Funds - Goldman Sachs India Equity (bought a 1% stake). The largest MF buyers include Hdfc Mutual Fund - Hdfc Banking And Financial Serv (bought a 4.1% stake).

GE Vernova T&D India also appears in the screener after FIIs and MFs increased their stake in the company by 5.2 percentage points QoQ and 2.7 percentage points QoQ, respectively in Q3FY25. This industrial machinery stock’s promoters sold an 8.4% stake through an offer for sale (OFS) worth Rs 3,324.9 crore at a floor price of Rs 1,550 per share. This stake sale was likely a profit booking by the promoters after its stock price surged by 152.8% over the past year.

You can find some popular screeners here.

The Baseline

22 Jan 2025

The rise of the rural consumer is changing FMCG | Screener: FMCG stocks outperforming their industry

By Swapnil Karkare

One evening, instead of absent-mindedly watching something with an audience rating of 4/10 on Netflix, I scrolled through a list of 2024’s top-grossing Indian movies. One thing stood out: three of the top five films were set in rural India. At the top of the list was Pushpa 2, based in a remote Andhra village. In third place was Stree 2, a horror-comedy that takes place in a small Madhya Pradesh town. Devara, the fifth in the list, is again based in an Andhra Pradesh village.

Popular culture is mirroring a shift in India’s consumption story. The latest Grameen Bharat Mahotsav 2025 in New Delhi, held earlier this month, couldn't have been better timed. Discussions focused on rural innovation and sustainable farming. Villages and small cities, often seen as passive participants, are playing a larger part in India's growth narrative, and brands are taking note.

In this week's Analyticks:

Rural revival: A recovery in rural India helps FMCG players, amid an urban slowdown
Screener: FMCG stocks outperforming their industry

A rural resurgence amid the urban gloom

The quarterly earnings season isn't looking great so far, especially for the consumer sector. In Mumbai and Bangalore's high-street shops, you see more salespeople than customers. FMCG companies admit that the reluctant Indian consumer is hurting their balance sheets.

Dabur expects its revenue to grow in the low single digits. Analysts estimate single-digit revenue growth for HUL, Britannia, and Nestle. Tata Consumer is expected to deliver healthy revenue growth, but faces margin pressures.

Mirae Asset Sharekhan projects a weaker overall consumer goods sector for Q3FY25 due to sluggish urban demand, compounded by inflation and fewer job opportunities. This has forced FMCG companies to focus on rural areas, which have been outgrowing cities for the last three quarters.

Rural consumers increase their spends

Most brands rely on small sachet sizes to penetrate the very price-elastic rural markets. But recently, HULobserved that rural consumers who previously purchased Re. 1 sachets of Clinic Plus shampoo for years, have upgraded to Dove’s Rs. 2 sachets. They are also buying Rs. 10 packs of noodles, chocolates, soaps, and detergents instead of the smaller five rupee ones, according to Kantar’s report. Brand and product preferences are changing, indicating lifestyle upgrades.

Recent income support schemes rolled out by several Indian states like the Ladki Bahin Yojana have also contributed to a decline in consumption inequality.

The change is beyond FMCG. Government data shows that spending patterns in rural areas are diversifying. There’s a growing interest in convenience and health products, with an increase in the share of processed food (from 9.6% to 9.8%), vegetables (from 5.4% to 6%), and fruits (from 3.7% to 3.9%) in consumption expenditure in 2023-24 compared to 2022-23.

The attitudes of rural consumers are also changing. Lakshmi Venu, director of TAFE, a farm equipment company, adds, "The knowledge asymmetry that used to exist between urban and rural is virtually gone. With cheap accessible data, today the rural customer has access to all the same information as the urban resident."

Rising income in non-metros drive luxury goods purchases

Like villages, consumers in tier II and III cities crave upgrades too. Pradeep Bakshi, Voltas’ Managing Director, notes that as per capita income increases in smaller towns, consumers are spending more on luxuries and durable goods.

Non-metro cities like Ludhiana, Jaipur, Lucknow and Coimbatore are witnessing increased spending power. Ethos, a luxury watch retailer, has launched boutiques in Kochi, Dehradun and Mangaluru. Tata Cliq Luxury reported a growing demand for brands like Louis Vuitton, Gucci, and Rolex in cities like Nagpur, Ajmer, and Aligarh. Non-metros now account for more than half of Tata Cliq Luxury's sales.

How are brands responding?

Brands are reaching non-metro consumers in unconventional ways. One example is the decision to launch Pushpa 2’s Hindi trailer in Patna instead of Mumbai.

FMCG companies are pushing their network into more villages. Daburhas reached 122,000 villages out of the over 6 lakh villages in India, and ITC has boosted its rural stockist network by 1.3 times in two years. Mahindra Logistics’ innovative ‘Direct to Kirana’ model has helped a leading multinational expand its market reach by 30% in non-metro cities. Even Durex is getting in on the action, cleverly targeting rural markets with premium products in smaller, pocket-friendly packs.

Smaller cities are making their online presence felt, outperforming metros in data consumption. Users in these cities are consuming 38–42 GB per capita per month, compared to Delhi and Mumbai’s 30–34 GB, and streaming platforms and the digital ecosystem are benefiting. Netflix and Amazon are investing in content delivery networks in cities such as Pune, Hyderabad, Ahmedabad, and Jaipur.

Local and blue-collar influencers such as Siraj Bachchan, a mimicry artist, Ankit Baiyanpuria, a Sonipat-based fitness creator, Rajesh Rawani, a truck driver, Santosh Jadhav from Sangli, and Pawan Bisnoi, an electrician-cum-mason from Fatehabad, are becoming prominent. They drive engagement at a fraction of the cost of traditional campaigns. Brands like Swiggy, Asian Paints, True Elements, and Jindal Stainless are collaborating with them, to connect with audiences in ways that big celebrities often can’t.

A structural improvement in rural consumption?

The government data shows that monthly spending (including social security benefits) in villages has surged 10% YoY, as against 8.5% YoY in cities, during the August 2023-July 2024 period. The gap between rural and urban spending has narrowed. In 2011-12, urban spending was 84% higher than rural. It’s down to 67% in 2023-24. This signals a more balanced economic landscape. Rural consumption growth has recently outpaced urban across most income categories.

It's time to dig deeper

Rima Bijapurkar, in her book "Liliput Land," challenges the traditional classification of consumers as just urban and rural. She points out that nearly 50% of India’s wealthiest households, reside in rural areas, and run agricultural businesses — busting the myth that wealth is concentrated in metros.

To truly understand the Indian consumer, Bijapurkar argues for more granular data: insights into income patterns, category-wise GST data, and comprehensive rural surveys. Without this, brands risk oversimplifying a complex and evolving market.

Of course, one cannot ignore the looming slowdown in the cities. As the government prepares the budget, all eyes are on how it balances the needs of urban and rural residents, and introduces much needed reforms in ease of doing business and in taxation, that have burdened urban India.

Screener: FMCG stocks outperforming their industries in price change and revenue YoY growthr

Packaged goods & personal products stocks have high quarter change and revenue growth

With the Indian markets undergoing a correction, we examine the performance of FMCG stocks over the past quarter. FMCG stocks are classified as defensive stocks, which provide relatively consistent returns and stable earnings regardless of the overall state of the stock market. This screener shows FMCG stocks outperforming their industries in the past quarter and quarterly revenue growth.

Major stocks appearing in the screener are CIAN Agro Industries & Infrastructure, Polo Queen Industrial & Fintech, Galaxy Cloud Kitchens, Radix Industries (India), Hipolin, Gillette India, Future Consumer, and Gokul Agro Resources.

CIAN Agro Industries & Infrastructure features in the screener with the highest YoY revenue growth of 452.5% to Rs 126.4 crore in Q2FY25, outperforming the edible oils industry’s average revenue growth by 439 percentage points. This helped the stock price surge by 126.2% over the past three months, outperforming the industry by 127.1 percentage points. The company’s revenue surged on the back of an increase in the agro and infrastructure divisions.

Gillette India is the only large-cap stock in the screener after outperforming the personal products industry price change by 20 percentage points after growing by 8.5% over the past quarter. The company’s revenue grew by 17.1% YoY to Rs 788.9 crore in Q2FY25, beating its industry average revenue growth by 14.8 percentage points. The company’s revenue increased, driven by an improvement in the grooming products segment.

You can find some popular screeners here.

Signing off this week,

The Trendlyne Team

The Baseline

08 Jan 2025

Potential rockets? Defence stocks of 2025 | Screener: Defence stocks with high durability scores and growth forecasts

By Swapnil Karkare

Welcome to 2025 - which Defence Minister Rajnath Singh calls the "Year of Reforms" for India’s defence sector. Singh wants to modernise the sector, and increase local production.

The government has been arguing that our defence processes are frozen in time. But reforms face many blocks, including outdated command structures, internal resistance to change ("we have always done it this way"), and tight budgets.

Still there has been progress: India’s defence exports have jumped 30X in the last decade, with help from the private sector.

The growth is happening just in time. The world is becoming increasingly violent, with the Israel-Hamas conflict, the Ukraine-Russia war, and China-Taiwan all simmering. The US has elected a President that puzzlingly, wants to annex Canada and Greenland. India’s defence needs will grow in a more aggressive world, and will need heavy investments.

One can argue that people being the way they are, the market for bullets will never die. A defence investor may see this as an optimistic statement, and these stocks have become quite popular. The message from Motilal Oswal’s Defense Fund ad — "India is investing in defence, are you?" — captures the shift over the last ten years.

In this week's Analyticks:

Defence stocks boom, as private companies make their mark
Screener: Defence stocks with high durability scores and revenue growth forecasts for Q3

India moves towards the West, and away from Russia

The French Rafale deal controversy marked an early shift in India's defence strategy. India hugged Russia close for decades for its military needs - the country accounted for 76% of our arms imports between 2009 and 2013.

That has drastically reduced, and is below 50had % for the first time since the 1960s. While Russia is still the largest supplier with36% of our imports, Western countries - France (33%) and the US (13%) - are getting the larger share. This is part of a strategy to reduce our reliance from any single nation.

India is the world’s largest arms importer, accounting for 9.8% of global arms imports. However, the country is now focusing more on manufacturing defence products here and reducing dependency on foreign suppliers.

India's defence makeover: government push boosts production and exports

Our defence transformation took off with 2014’s ‘Make in India’ initiative. The government identified over 36,000 defence items that could be produced locally, ranging from complex systems, sensors, weapons, and ammunition. Since then, public sector companies have placed orders worth over Rs. 7,500 crore with domestic defence vendors

India's diplomats have also turned into brand ambassadors for Indian-made defence products. India’s defence exports touched Rs. 21,000 crore in FY24, growing by 40% CAGR over the last decade. Defence production has soared 8% CAGR, from around Rs. 74,000 crores in FY17 to Rs. 1.3 trillion in FY24. The government hopes to hit Rs. 3 trillion in production and Rs. 50,000 crore in exports by 2030.

Enter the entrepreneurs: open doors for the private sector

The public sector has long dominated India's defence production, but the private sector has made recent gains, with a 20% share in production and 60% in exports. The increase in private sector participation has led to interest from a wide range of investors, including retail, mutual funds, and foreign institutions.

In 2022, the NSE launched the Nifty India Defence Index, which has seen an impressive 4.5-fold rise since its inception, further fueling investor interest in the sector. As a result of this growing interest, fund houses like HDFC, Motilal Oswal, Aditya Birla Sun Life, and Groww have launched defence-specific schemes, with three of them debuting in 2024.

A Balasubramanian, CEO of Aditya Birla Sun Life, highlighted the large order books of top defence companies as attractive for investors. However, he noted that state-owned firms still dominate the sector, with the government holding majority stakes in many companies. Limited free float also makes these stocks vulnerable to price swings.

High valuations is another worry. The HDFC scheme, for example, had to stop accepting fresh investments due to worries about peak valuations. But over the last six months, the defence sector index corrected by 20%, driven by slower order inflows, supply chain disruptions, and other execution challenges.

Valuations are a high wall to climb for defence

The sector is promising, but stocks are at pretty high valuations. Surjitt Singh Arora of PGIM India AMC warns that “valuations have run ahead of fundamentals”. Shiv Chanani of Baroda BNP Paribas Mutual Fund agrees, pointing out that while order books provide revenue visibility, execution hurdles and rich pricing are worries.

Despite this, Binod Modi of Mirae Asset Sharekhan, is among the optimists, arguing that the sector’s growth potential justifies its current valuations. He also says that the sector will see premium valuations for the next 3-5 years. Brokerages like Antique and Elara Securities share this bullish outlook, and point to the recent correction as a good entry point for long-term investors.

Diamonds in the mix?: Looking for good fundamentals amid high valuations

Among the key players in the industry, Solar Industries, Astra Microwave, Hindustan Aeronautics (HAL) and Bharat Electronics (BEL) have grown steadily in revenue, net profit, order books and return ratios.

ICICI Securities expects Solar Industries to increase its share of defence revenue over the next five years, particularly with the global shortage of ammunition creating new opportunity. Astra Microwave’s healthy order book and robust pipeline have also kept its revenue and profitability healthy, especially with a focus on higher-margin domestic contracts.

ICICI Direct forecasts that HAL’s revenue growth will rise significantly from FY26, due to better execution. And Mirae Asset Sharekhan expects BEL to be the biggest beneficiary of recent proposals from the Defence Acquisition Council, including maritime surveillance, and other capability upgrades.

Challenges like high valuations or FII sell-offs could dampen the sentiment in the near term. But the long-term potential of the sector has made analysts upbeat.

Since FY23, the government has cleared Rs. 8.3 trillion worth of Acceptance of Necessities (AoNs) for defence projects — a 53% jump from the past decade. Government procurement begins after an AoN, and this signals a massive pipeline of upcoming projects for defence companies. According to Elara Securities analysts, there are substantial growth opportunities for the sector in the coming years, driven by the government’s focus on indigenisation and exports.

The government is also looking to increase the role of startups, SMEs, and corporates in various segments such as research and AI. Antique Research is particularly excited about the untapped potential in this space, noting that several defence companies with unique technologies and capabilities are still not publicly listed - including Tata Advanced Systems, Reliance Naval and Engineering, Mahindra Aerospace, Kalyani Strategic Systems, DRDO, Munitions India, and BrahMos Aerospace. A long established sector is seeing fresh excitement, with young players rising alongside promising, listed companies.

Screener: Defence stocks with the highest Durability scores and revenue growth estimates for Q3FY25

Defence stocks have high durability and revenue growth estimates in Q3

As we wait for the Q3 result season, we look at defence stocks with the highest Forecaster estimates for revenue YoY growth and a good Trendlyne durability score. Stocks with high durability scores are companies rated with good management, that have consistently demonstrated good growth and cash flow, stable revenues and profits, and low debt. This screener shows such defence stocks, which are expected to show high revenue growth in upcoming results

The most notable stocks in the screener are Bharat Dynamics, Data Patterns (India), ideaForge Technology, Bharat Dynamics, Hindustan Aeronautics, Mazagon Dock Shipbuilders, and Garden Reach Shipbuilders & Engineers.

Bharat Dynamics shows up in the screener with a Trendlyne Durability score of 70 and Forecaster estimates revenue growth of 102.8% YoY in Q3FY25. This debt-free defence stock’s high score can be partly attributed to its net profit increasing YoY in five out of the past eight quarters. Analysts at Phillip Capital and Elara Capital expect the company’s revenue to grow due to a strong order backlog and its inclusion in defence modernisation programs.

Bharat Electronics also features in the screener with the highest Trendlyne Durability score of 85 among defence stocks. Its good durability can be attributed to consistent revenue growth YoY for the past nine consecutive quarters and net profit increasing YoY for the past eight quarters. The company also has low interest expenses and a strong return on equity (RoE) of 16.8% in FY24. Its trailing twelve-month (TTM) PE stands at 45.4, higher than its three-year and five-year average PE. Trendlyne’s Forecaster estimates this company’s revenue to grow by 28.6% YoY in Q3FY25. Analysts at Sharekhan expect its revenue to grow due to increasing defence spending in India, the structural trend of indigenisation, and export opportunities.

You can find some popular screeners here.

Signing off this week,

The Trendlyne Team

The Baseline

03 Jan 2025

Did the richest get richer in 2024?

By Swapnil Karkare

Born in Tehran in 1979, Adam Foroughi’s family fled to the US when he was a child. In 2012, he co-founded AppLovin, a gaming and mobile ad business that struggled at first. But in 2024, the company pivoted to AI, and surprised investors with its stellar performance, which pushed up the stock price by more than 700% this year.

The owner of Chinese vaccine maker Zhifei, Jiang Rensheng, was a primary school teacher. Sunil Mittal started out manufacturing bicycle parts. Others like Musk and Ambani, came from business families. What they all have in common: they are now among the 500 richest people in the world.

In 2024, the combined net worth of the top 500 billionaires reached a staggering $9.9 trillion, rising by 19%. But 112 individuals in the top 500 experienced substantial losses. While some billionaires rode a rising wave in sectors like AI, retail, and finance, others faced economic slowdowns and volatile markets.

Europeans struggled, while Asians, Americans prospered

In 2024, the wealth of Filipino billionaires doubled, while Mexican fortunes dipped by about one-sixth. The wealth of American and Chinese billionaires grew 34% and 14%, while Indian billionaires saw a modest 9% growth, beating the French (-14%) and Germans (6%).

One country dominates. More than one-third of the top 500 billionaires in the world live in the US. Together, they have a net worth exceeding $5 trillion. These are familiar names - Elon Musk, the richest person worldwide, Jeff Bezos, Mark Zuckerberg, Bill Gates, Warren Buffett.

China is second with 56 billionaires in the top 500, followed by India and Russia with 26 and 25 billionaires, respectively. Mukesh Ambani and Gautam Adani from India, Zhong Shanshan and Ma Huateng from China, and Russia’s Alexey Mordashov lead their respective countries. Ambani became the richest Asian person in 2024 with a net worth of $91 billion.

The tech boom vs. the consumer slump

The technology sector was a driving force behind wealth creation in 2024. Tech entrepreneurs added more than $900 billion collectively to their wealth -- the rise of AI and the strong US economy fuelling this growth. While tech represents only 82 people (16%) of the top 500 billionaires, it is 32% of the total net worth ($3 trillion).

Not doing so well? The consumer and commodities sectors. Slow growth in China, rising interest rates, and a pause in revenge spending post-pandemic, especially in luxury, resulted in a $21 billion fall in the net worth of consumer-sector billionaires, with French billionaires hit the hardest. Bernard Arnault, the French founder of the world’s largest luxury company LVMH (which owns Louis Vuitton), saw his wealth drop by $31 billion - equivalent to Azim Premji’s entire net worth.

The US is the world's dominant economy, and it takes up a lot of space in the 500 billionaires list.

Who are India’s Richie-Riches?

Out of the 500 ultra-rich, Indians take up 26 spots, underscoring the country’s growing influence in the global economy. However, India’s top two wealthiest individuals - Mukesh Ambani and Gautam Adani slipped out of the $100 billion club in the last three months.

18 Indian billionaires saw their wealth increase. Shiv Nadar, the founder of HCL Technologies and the third richest person in India, witnessed the highest jump of $9 billion in his wealth. Others whose net worth spiked include Sunil Mittal, Dilip Shanghvi, Savitri Jindal, Samir & Sudhir Mehta, Murali Divi, Vikas Oberoi and Rahul Bhatia.

Subdued consumer demand has weakened share prices and hit companies like Reliance Retail (Mukesh Ambani), DMart (Radhakrishnan Damani), and Britannia (Nusli Wadia), while a healthy luxury real estate market has boosted the net worth of individuals like KP Singh (DLF) and Vikas Oberoi (Oberoi Realty).

What about the rest of us?

India has witnessed a rise in the number of millionaires and billionaires over the past two decades. However, overall per capita wealth has grown by a mere 6% CAGR, from $2,088 in 2012 to $3,755 in 2022.

The disparity is striking: the average Indian billionaire's net worth is 6 million times India's per capita median wealth, far more than Russia (1.7 million times) and China (0.5 million times). Developed nations, on the other hand, show smaller disparities (0.05 to 0.3 million times).

India stands out as an extreme case compared to both emerging and developed economies. Here, the rise of billionaires is well underway. But the rest of the country has a lot of catching up to do.

The Baseline

13 Dec 2024

The winners and losers of 2024 | Screener: Consistent share price gainers over five years

By Swapnil Karkare

It's December, which means that analysts are scrambling over each other to predict the market's path for the next year. Morgan Stanley for instance, forecasts that the Sensex will touch 1,05,000 in 2025.

Morgan Stanley was quite gung-ho about the Sensex in December 2023 as well, and predicted 86,000 for 2024. The index only briefly flirted with the 86,000 level this year but then tumbled.

Humans are bad at guessing the future. In 1924 for example, people predicted that food would be unaffordable in 2024 - "milk will be served with a medicine dropper and an egg will be the price of a woman’s love.” So at least Morgan Stanley has been a bit more accurate.

The market saw a lot of volatility this year. Financial and industrial stocks surged while auto and FMCG stocks tanked. Signs of the economy slowing down and a sell-off by foreign investors led to a correction in September.

But certain stocks emerged as the clear winners of 2024, even as others struggled. This saw different company CEOs saying very different things about the 2025 outlook. For example PB Fintech, one of the top gainers, has been quite optimistic, saying, “We are not seeing any signs of a slowdown yet.” On the other hand, Asian Paints, one of the top losers, has been more guarded, with CEO Amit Syngle stating, “We are being cautious about demand because we feel that other consumer industries have seen challenging demand conditions.”

Why are some companies still doing well, while others struggled? We take a closer look at the top winners and losers in the Nifty 200 index.

In this week's Analyticks,

The top ten: Winners and losers of 2024
Screener: Consistent Highest Return Stocks over Five Years

The Fundamentals vs. Valuations struggle

Fundamentals matter! Investors pay especially close attention to company financials in volatile markets. As a result, companies with strong fundamentals (reflected by Trendlyne Durability Scores above 60) saw skyrocketing prices.The laggards tended to have poor durability scores.

Even after market corrections, fundamentals have continued to drive stock performance—for instance, the rise of BSE Ltd. and the fall of Bajaj Auto.

However, stretched valuations among top gainers hint at either peaking prices or a TINA (There Is No Alternative) problem within sectors. Investors may be piling into these stocks due to a lack of better options, despite high valuations.

Let us dive into the top gainers and losers of 2024. Within each top ten list, we look more closely at the top five winners and losers.

Top Gainers: These stocks got a boost from strong financials, and a booming sector story

Oracle Financial Services Software

Oracle has benefitted from a surge in technology spending by banks – a 7% increase among the top 5 US banks, which are embracing GenAI. Oracle generates 90% of its revenue from product licenses, including solutions like Oracle FLEXCUBE Universal Banking.

It reported 18% YoY growth in revenue and a 38% YoY jump in net profits in Q2FY25. Oracle Corp, its parent company in the US, has also outperformed major tech giants like Microsoft, Apple, and Salesforce this year.

PB Fintech

PB Fintech, the parent company of Policybazaar and Paisabazaar, has shifted towards Unit Linked Insurance Plans (ULIPs). This pivot, along with strong insurance renewals have helped it beat challenges in the credit business. Revenue increased 47% YoY in H1FY25.

Revenue from new businesses - such as corporate insurance, an agent aggregator platform, and the UAE retail insurance - surged 87% YoY in Q2FY25. The company has secured the account aggregator (NBFC-AA) license from the RBI, adding another growth lever.

Dixon Technologies

Dixon Technologies has evolved from manufacturing LED TVs to becoming a one-stop shop for electronics manufacturing services (EMS) in India. It manufactures mobile phones, refrigerators, wearables, and lighting products and is now venturing into laptops and IT hardware manufacturing. Its big-name partners include Xiaomi, Samsung, Apple, Nokia, Motorola, Panasonic, Acer and Bosch.

With revenue growth of more than 200% YoY in H1FY25, Dixon's mobile and EMS division is the fastest-growing segment. It is one of the key beneficiaries of the government’s Production-Linked Incentive (PLI) scheme. Its revenue has surged from over Rs. 12,000 crore in FY23 to nearly the same in Q2FY25 alone.

Rail Vikas Nigam Ltd. (RVNL)

RVNL has won some coveted railway projects, including the Nagpur metro, infrastructure work in the Central zone, an EPC contract in Maharashtra, and much more. It has expanded internationally through projects in Saudi Arabia, Botswana, Dubai, Uzbekistan and the Maldives.

The company's inclusion in the MSCI India Index has attracted foreign investors, increasing FII shareholding from 2% to 5% last year. However, its revenue and profit have declined by 13% YoY and 26% YoY in H1FY25, raising doubts over its ability to keep the rally going.

Cochin Shipyard

The government's push for indigenous defence manufacturing has given Cochin Shipyard a big boost, with defence contracts making up 70% of its order book. It can now build and repair larger vessels such as LNG carriers and new-generation aircraft carriers.

It booked solid growth in revenue and net profits of 26% YoY and 30% YoY in H1FY25. It has a total order book of Rs. 22,500 crore, a shipbuilding pipeline worth Rs. 7,800 crore, and mid-stage proposals valued at Rs. 30,000 crore.

Top Losers: The backbenchers of 2024

Vodafone Idea

Having Vodafone Idea in your portfolio feels like a recipe for heartburn. Each year, the company sees a rollercoaster of highs and lows, where brief moments of optimism are interrupted by more challenges. The company's debt pile of over Rs. 2 lakh crore has been worsened by negative equity. From 22.75 crores in September 2023 to 21.25 crores in September 2024, its subscriber count has reduced year after year.

Brokers highlight that the financial position will become more vulnerable once AGR dues become payable from FY26 onwards. According to Kotak Institutional Equities, the company is staring at a cash shortage of Rs. 10,400 crore over FY25-27 and Rs. 74,000 crore during FY28-32.

IndusInd Bank

The banking sector faces pressures from rising stress in unsecured lending and microfinance portfolios. IndusInd Bank pushed microfinance loans aggressively in recent quarters, and these now account for 9% of IndusInd’s loan book as of September 2024. The gross NPAs in this segment have jumped from 5.16% in Q1FY25 to 6.54% in Q2FY25. That has led to a 39% YoY drop in net profit of Q2FY25.

The bank faces a long road to recovery. Although other banks are also stretched, the impact on credit costs for IndusInd is higher (140 bps vs. 50-60 bps), according to Macquarie Capital. Analysts expect microfinance stress to remain high even in Q3.

Asian Paints

A once-star consumer play is struggling with weak demand, rising raw material costs, and unseasonal rainfall, which have impacted the paint industry and affected revenues, margins and profits.

Rising competition within the paint industry has also eroded the market share of Asian Paints. Sales and profits have been declining year-on-year for the last three quarters. FIIs have been exiting from this stock gradually, from over 20% in FY22 to 17% in FY23 to 15% in September 2024.

Bandhan Bank

Despite impressive revenue growth averaging 22% YoY, Bandhan Bank's asset quality problem has raised its ugly head again, with gross NPAs rising from 3.8% in Q4FY24 to 4.7% in Q2 FY25.

Impressive loan book growth has delivered over 30% YoY net profit growth in the last four quarters. However, weakness in its microfinance portfolio and governance-related issues have taken a toll on the stock prices. Recently, ICRA downgraded the non-convertible debentures (NCDs) to AA- from AA.

Adani Total Gas

Adani Total Gas saw a steady 5-10% YoY revenue growth over the past year. However, after four consecutive quarters of double-digit net profit growth, the company's Q2FY25 net profit increased by a modest 7%. Due to limited availability, the government has reduced the allocation of Administrative Price Mechanism (APM) gas to City Gas Distribution (CGD). Adani Total Gas has seen a 13% reduction in its allocations, which will affect its financials.

The controversies have also left it limping. The Hindenburg report and the US bribery case have negatively impacted Adani Group stocks, discouraging foreign investors. Foreign shareholding has declined from 17% in September 2022 to 13% in September 2024.

2024 was a sector story

In 2024, sectors such as insurance, chemicals, construction materials, FMCG and private sector banks have lagged the index, especially after recent market corrections. But sectors like durables, industrials, financial services, realty, healthcare, technology, and public sector banks have shown resilience and growth.

Improving capital expenditure spending has raised the growth outlook across some industries. A stronger US economy and the China plus one strategy has raised the export potential for Indian manufacturers in pharma, chemicals and IT. However, depressed demand and stagnant incomes have put pressure on consumer, microfinance and auto.

2025 comes with a new US administration, continuing chaos in the Middle East, and a new RBI governor. Can Sensex touch 1,05,000 next year, or will the predictors be crying into their cups? We shall see.

Screener: Consistent Highest Return Stocks over Five Years

Electrical equipment stocks have the highest price growth in five years

The Indian stock market has been facing pressure for a few months now due to an increase in inflation, global conflicts, and high foreign institutional investor (FII) selloff. This week, we ook at stocks that have given consistently high returns over the last five years. This screener shows stocks which saw the highest performance in the past 5 years while also rising in the past one or two years.

The screener majorly consists of stocks from the heavy electrical equipment, electric utilities, industrial machinery, iron & steel products, and IT consulting & software industries. The most notable stocks appearing in the screener are CG Power & Industrial Solutions, Elecon Engineering, HBL Power Systems, RattanIndia Enterprises, Mazagon Dock Shipbuilders, BSE, Jupiter Wagons, and Suzlon Energy.

CG Power & Industrial Solutions has the highest 5-year price change of 6,461.3% among Nifty 500 stocks in the screener. This heavy electrical equipment company has continued to rise by 75.3% over the past year despite poor market conditions. It has recovered from a sharp decline in revenue and net profit during the Covid lockdown and has achieved its pre-Covid levels of Rs 8,152.2 crore and Rs 1,427 crore, respectively in FY24. On the other hand, it has posted a net loss during FY16-20 which rose sharply to first a net profit of Rs 1,427 crore in FY24. Consistently falling raw material costs and the company’s efforts to reduce procurement and production expenses helped in net profit growth.

Elecon Engineering comes in next with a 4,167.4% growth in its stock price over the last five years. This industrial machinery stock has continued to grow by 41% in the past year. It has given a moderate revenue CAGR growth of 9% over the last five years due to the effect of the lockdown, however, over the past three years, its CAGR growth has rebounded to 23.6%. Similarly, its net profit gave a net profit CAGR of 38.4% over the last five years compared to a CAGR of 83.4% over the past three years. The company took strong measures to curb expenses during the Covid period which has helped it to achieve its highest operating profit margin of 24% in FY24, contributing to net profit growth.

You can find some popular screeners here.