These two Nifty 50 stocks rallied over 100% in the last one year

Over the past year, as most investors on Dalal Street have chased small- and mid-caps, two constituents of the Nifty50 index were busy doubling investors’ money. Any guesses? These are automobile major Tata Motors and Bajaj Auto. Where the former advanced 132% between March 18, 2023, and March 18, 2024, the latter surged 123%. Two-wheeler major Hero MotoCorp is next on the list with gain of 93.37%. On the other hand, the benchmark index NSE Nifty50 gained 29% during the period, while the Nifty Midcap 250 and Nifty Smallcap 250 indices soared 51.62% and 56.76%, respectively.

Sharing its view on the auto sector, Motilal Oswal Financial Services said it is positive on the PV segment as it is expected to see better earnings growth, led by improved mix. While the two-wheeler segment is expected to outperform other segments with high-single-digit volume growth, most of the growth seems already priced in the recent run-up of stocks. It also expects CV growth to moderate in the near term due to elections and then pick up in H2FY25. The brokerage has ‘Buy’ rating on Bajaj Auto and Hero MotoCorp with a target price of Rs 6,775 and Rs 5,560, respectively.

Vikas Khemani, Founder, Carnelian Asset Advisors says, “We are positive on automobiles as the growth is coming back into the sector.”

With a rally of 90.32%, Coal India is the next big gainer on the list. Shares of the company climbed to Rs 421.85 on March 18, 2024 from Rs 221.65 on March 17 a year ago. Adani Ports and Special Economic Zone (APSEZ), NTPC, Oil & Natural Gas Corporation and Cipla also gained somewhere between 70% and 90% during the same period. Brokerage Antique Stock Broking is bullish on Coal India with a target price of Rs 508. The scrip traded at Rs 414 in the morning trade on March 19.

“Coal India estimates a capex of Rs 80,000 crore over the next five years while planning to achieve its 1 btpa+ target. Even then, on a conservative volume/ pricing estimate, we expect the company to clock 15% and 16% CAGR in revenue and EBITDA by FY22–26E,” Antique Stock Broking said. On the other hand, Motilal Oswal Financial Services said that APSEZ is well on track to cross its revised cargo volume guidance of 400 MMT during FY24. It continues to gain market share while generating strong cash flows and maintaining its leverage position, with a net debt-to-EBITDA ratio of 2.5x as of December 23. The brokerage maintained its ‘Buy’ rating on APSEZ with a target price of Rs 1,600.

Among the other major outperformers, Tata Consumer Products gained 68% in the last one year. It was followed by Adani Enterprises (up 66%), BPCL (up 66%), Sun Pharmaceutical (up 64%), Larsen & Toubro (up 62%), Bharti Airtel (up 62%), Mahindra & Mahindra (up 58%) and Power Grid Corporation of India (up 54%).

Sharing his view on the market outlook, Prasanna Pathak, Director, Asit C Mehta Investment Intermediates, said, “In the near term, markets are fairly priced, and quarterly earnings would determine companies’ future prospects. However, the global interest rate scenario would be the deciding factor in the medium to long term. The rate cut cycle could begin towards the end of CY24. From a medium to long-term perspective, financials, technology, auto and other rate-sensitive sectors would deliver better-than-average returns. The final budget from the new government’s post-election results would also give insight into focus sectors for the coming five-year term.”

Global financial services firm Jefferies recently shared 11 ideas which may deliver 15-25% CAGR returns over the next 5 years. These include stocks such as Amber Enterprises, Ambuja Cement, Axis Bank, Bharti Airtel, JSW Energy, L&T, Macrotech, Max Healthcare, SBI, TVS Motors and Zomato.