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.
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