NIFTY at a record new high: What are the critical equity market numbers indicating?

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NIFTY scaling a new high is a moment to celebrate for all equity investors, however, it is also the time to review your investment portfolio on where it stands and does it need some realignment. To make the next move right, equity investors need to assess the past trends and anticipate the likely future direction. This is where critical market numbers help in making sense of where the market stands and the broader direction in which it is likely to move. If your equity portfolio needs some tweaking this is a good time to align your future moves with current understanding of the market.
Let us look at the broader story which the critical equity market numbers are telling.

Large cap driven rally

Largely it is the sound recovery in large cap universe while smaller capitalization is yet to get back to previous highs. NSE Midcap 100 is only marginally behind its last year level. NSE Smallcap 100 indicates that they are still behind their last year’s level and need to recover considerably to reach their previous highs.

Nifty closing high in 2021 was 18477.1 on 18 October 2021.

Index 18-Oct-21 29-Nov-22 % change
Nifty 18,477.1 18,618.1 0.76
NSE Midcap 100 32,884.8 31,677.3 -3.67
NSE Smallcap 100 11,677.6 9,916.1 -15.08

Returns are point-to-point absolute returns (not annualized)

New high with lower PE multiples

Though Nifty has reached a new high but if we compare the valuation in terms of PE ratio then it is still significantly lesser than previous year’s numbers. Since the stock prices have broadly risen for NIFTY stocks, the PE number tells us about the substantial earnings growth within last year. This has kept the PE multiple at a much lower level and shows valuations are still quite conservative. NSE Smallcap 100 is trading at almost half of the PE ratio it had last year. It hints at higher probability of either earnings growth to remain muted in the near future or the valuation may rise in coming days.

PE ratio
Index 18-Oct-21 28-Nov-2022*
Nifty 27.08 23.32
NSE Midcap 100 29.69 23.66
NSE Smallcap 100 31.41 16.85

*Latest index PE is available for 28 Nov 2022. Bloomberg has not yet updated 29 November 2022 PE.

The rally is yet to become broad based

Less than half of the stocks have given positive returns in all three market capitalization categories with midcap having much lesser numbers of stocks with positive returns and smallcap with the least proportion of stocks with positive return.

Number of stocks
Index Positive returns Negative returns No returns available#
Nifty 24 26 0
NSE Midcap 100 40 56 4
NSE Smallcap 100 34 59 7

# Stock price data not available, stock may be listed later.

The biggest beneficiaries among NIFTY stocks

Adani Enterprises is the biggest beneficiary with more than 140% rise in share price and Sun Pharma is at fifth place with more than 25% rise in its share price compared to last year’s peak

5 Nifty stocks with highest returns
Name 18-Oct-21 29-Nov-22 % change
Adani Enterprises Ltd 1,615.5 3,878.4 140.1
Mahindra & Mahindra Ltd 911.0 1,257.1 38.0
ITC Ltd 262.6 342.3 30.4
ICICI Bank Ltd 745.5 946.8 27.0
Sun Pharmaceutical Indus 835.9 1,049.9 25.6

The biggest losers among NIFTY stocks:

Wipro turned out to be biggest loser with more than 42% fall while Tata Steel is at fifth place with more than 24% fall in share prices compared to last year’s NIFTY peak.

5 Nifty stocks with lowest returns
Name 18-Oct-21 29-Nov-22 % change
Wipro Ltd 709.8 405.2 -42.9
Divi’s Laboratories Ltd 5,343.1 3,372.7 -36.9
Tech Mahindra Ltd 1,479.7 1,074.6 -27.4
Bharat Petroleum Corp Ltd 462.5 339.1 -26.7
Tata Steel Ltd 141.1 106.1 -24.8

Top midcap stocks with highest returns

Tube Investments Of India has topped the chart with 97.2% return while TVS Motor is the fifth top gainer with 77.5% return among the NIFTY Midcap 100 stocks since the previous NIFTY peak.

5 Nifty Midcap 100 stocks with highest returns
Name 18-Oct-21 29-Nov-22 % change
Tube Investments Of India 1,391.3 2,743.7 97.2
Poonawalla Fincorp Ltd 160.1 313.3 95.7
Varun Beverages Ltd 600.2 1,146.2 91.0
Tata Teleservices Maharashtra 55.7 99.2 78.2
Tvs Motor Co Ltd 585.9 1,039.9 77.5


The biggest losers among midcap stocks

Indiamart Intermesh is the worst performing midcap stock in the NIFTY Midcap 100 category with more than 52% fall in price while Sona Blw Precision Forgings is the fifth biggest loser with more than 41% fall in share prices compared to the last peak of NIFTY.

5 Nifty Midcap 100 stocks with lowest returns
Name 18-Oct-21 29-Nov-22 % change
Indiamart Intermesh Ltd 9,216.1 4,384.4 -52.4
Godrej Properties Ltd 2,502.8 1,278.6 -48.9
Indian Energy Exchange Ltd 265.6 148.4 -44.1
Nippon Life India Asset 451.7 262.6 -41.9
Sona Blw Precision Forgings 765.7 450.6 -41.2


Top smallcap stocks with highest returns

Elgi Equipments has topped the chart with 132.8 % return while Easy Trip Planners is the fifth top gainer with 82.8% return among the NSE Smallcap 100 stocks since the last NIFTY peak.

5 Nifty Smallcap 100 stocks with highest returns
Name 18-Oct-21 29-Nov-22 % change
Elgi Equipments Ltd 202.1 470.4 132.8
Bharat Dynamics Ltd 413.2 948.8 129.6
Kpit Technologies Ltd 337.0 718.1 113.1
Shree Renuka Sugars Ltd 31.2 58.2 86.4
Easy Trip Planners Ltd 36.3 66.4 82.8


The biggest losers among smallcap stocks

Zensar Technologies is the worst performing smallcap stock in the NSE Smallcap 100 category with more than 55.8 % fall in prices while Mastek is the fifth biggest loser with more than 49.5% fall in share prices compared to the last peak of NIFTY.

5 Nifty Smallcap 100 stocks with lowest returns
Name 18-Oct-21 29-Nov-22 % change
Zensar Technologies Ltd 502.6 222.1 -55.8
Lux Industries Ltd 3,728.7 1,682.7 -54.9
Quess Corp Ltd 939.4 437.5 -53.4
Chemplast Sanmar Ltd 802.5 386.2 -51.9
Mastek Ltd 3,315.8 1,675.3 -49.5

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