While markets have turned volatile in recent weeks, the Nifty 50 index has had a strong year, rising by 19.7%, and touching its all-time high of 22,124.2 on January 16. Of the 29 sectors on Trendlyne’s dashboard, 27 have outperformed the Nifty 50 index. Except for chemicals & petrochemicals and FMCG, all major sectors surpassed the index by a good margin. Sectors like general industrials, durables, shipping, construction & engineering and fertilizer are also set to benefit from government outlays in FY25.
In this edition of Chart of the Week, we look at the top-performing sectors over the past year on Trendlyne’s sector dashboard.
Telecom and realty sectors double money for investors
Let’s start with the telecommunications equipment sector, which rose by 150.4% over the past year. The sector got a boost from the government's initiatives to export homegrown 4G and 5G technologies to attract investments and strengthen foreign ties, especially with African and Pacific countries. The Cellular Operators Association of India (COAI) has also submitted recommendations for various regulatory levies for the telecom sector in the 2024-25 budget. Top performers include ITI, Avantel, and GTL Infrastructure, with respective annual gains of 357.1%, 238.8%, and 52.2%.
The realty sector is another star performer with a 106.2% rise in the past year. It is expected to continue its robust performance into 2024, driven by expected rate cuts and sustained demand. According to reports, the Prime Minister’s ‘housing for all’ scheme will continue to benefit buyers. Top performers in this sector include Signatureglobal (India), Prestige Estates, and D B Realty, which rose 192.8%, 190.6%, and 170.8% in the past year, respectively.
Centre’s capex and subsidies boost general industrial and fertilizer sectors
The general industrial sector has risen by 91% over the past year. This surge is linked to the government allocating 3% of India's GDP as capital expenditure for this sector in the previous Union Budget. While the upcoming general elections might lead to a moderation in capital expenditure, Motilal Oswal suggests it is likely to remain high. Top performers in the sector include GE T&D India, Jindal Saw, and Suzlon Energy with annual gains of 452.9%, 320.9%, and 318%, respectively.
The fertilizers sector also rose by 86.1% in the past year. Analysts project the fertilizer subsidy bill to hit Rs 2 trillion in 2024, having already consumed 63% of its total capacity by November 2023. The top performers in the sector were The Fertilizers and Chemicals Travancore, Gujarat State Fertilizer & Chemicals, and National Fertilizers. They have risen by 161.1%, 152.1%, and 71.3% in the past year, respectively.
The transportation sector surged 78.3% in the past year, driven by the shipping industry. Cochin Shipyard, Mazagon Dock Shipbuilders and Garden Reach Shipbuilders & Engineers rose by 244%, 208.2% and 85.5%, during the period. The growth can be attributed to strong order books from domestic and offshore clients, and the government’s push for defence funding.
Railway stocks set to benefit from Union Budget 2024-25, PLIs drive consumer durables sector
The cement & construction sector rose by 71.7% in the past year, helped by the government's focus on capital spending in railways, roads, and defence. This trend is expected to continue at a moderate pace. Top performers in this sector include Ircon International, Rail Vikas Nigam and Texmaco Rail & Engineering, with annual gains of 339%, 317.4% and 270.7%, respectively.
Next, we have the consumer durables sector with a 70.3% rise. According to HDFC Securities, 2024 will likely see a rise in demand for high-quality products made locally with advanced features and sustainable designs. CRISIL forecasts an 8-10% growth in the sector this year, driven by a preference for premium products in urban areas. The white goods PLI scheme, with an allocation of Rs 6,238 crore spanning from 2021 to 2029, also supports this growth. Top performers of the sector include HBL Power Systems, Kaynes Technology India and Apar Industries. They have risen by 391.8%, 239.9%, and 219.6%, respectively, in the past year.
Lastly, the metals & mining sector rose by 64.5% in the past year due to an uptick in real estate and infrastructure activities. India's finished steel consumption reached a five-year high in H1FY24 on the back of increased construction activities and high demand from the automobile sector. According to Fitch, India’s steel consumption for FY24 is expected to grow by 12%. However, higher Chinese imports have kept prices under pressure. In response, the government is developing a PLI 2.0 scheme to boost steel production. Top performers in this sector are Electrosteel Castings, Sandur Manganese & Iron Ores, and Gujarat Mineral Development Corp with annual gains of 279.8%, 241.4% and 205.8%, respectively, in the past year
