IT, pharmaceutical and oil stocks offer positive returns of up to 60-70% in FY22; HDFC, HUL Latecomers

The Indian stock market has performed well in the just ended financial year 2021-2022. The benchmark ESB Sensex jumped around 18% to end the year at 58,569 points. The index also started the new 2022-23 financial year with a positive now and rose from 708.18 to close at 59,276.69 on Friday.

Among the Sensex’s 30 stocks, all companies except HDFC, UltraTech Cement and Hindustan Unilever Ltd posted positive returns in 2021-22. Let’s take a look at the industry-specific movement over the past fiscal year:

Information technology stocks

The information technology sector performed well in 2021-22 and delivered returns in the 17-47% range. Tech Mahindra recorded the highest return of around 47% between April 2021 and March 2022, followed by Infosys (nearly 37%) and Tata Consultancy Services and HCL (around 17% each).

Bank stocks

The banking sector has seen a mixed trend in returns. On the one hand, private sector lender ICICI Bank and largest public lender State Bank of India jumped around 25.17% and 37.7%, respectively, while on the other hand, HDFC Bank , IndusInd Bank and Kotak Mahindra Bank returned less than 1% during the year. Axis Bank grew by 9.5% in 2021-2022.

Automotive industry

Automaker stocks underperformed the benchmark and rose in a range of 1-11%. Maruti Suzuki jumped 11% between April 1 last year and March 31 this year, while Bajaj Auto and Mahindra and Mahindra rose only 1% and 2.87%.

Telecom, Pharmacy

In the telecommunications sector, Bharti Airtel is the only telecommunications service provider to be among the top 30 constituents of Sensex. The company performed well at 45.94% in the 2021-22 financial year. Its share currently stands at Rs 758.60 each. In the pharmaceutical sector, Sun Pharma performed very well and achieved 51% in the just ended 2020-21 financial year.

Others

In fiscal 2021-22, heavyweight Reliance Industries jumped 31.8%, engineering giant Larsen and Toubro rose nearly 25%, the conglomerate’s share price Diversified ITC rose 15.9%.

State-owned ONGC had a strong return of 63.06%, Tata Steel was up 60%, NTPC was up 32% and PowerGrid jumped 39% in the year.

Asian Paints climbed 22%, Titan Company grew around 61%, Nestlé grew 2.26% and Bajaj Finserv saw a 76% jump in 2021-22.

The latecomers

Among the laggards were HDFC, UltraTech Cement and Hindustan Unilever Ltd. Major housing finance company HDFC fell 2.55% during the year, UltraTech Cement fell 1.63% and HUL posted a negative return of 14.91%.

Go forward

Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities, said: “Commodity price movements, inflation figures and central bank policy decisions are a few key factors that will likely weigh in national and global markets.

Geojit (Research) Head of Financial Services, Vinod Nair, said, “Russian-Ukrainian war, crude oil movement and RBI monetary policy meetings would be the major factors that will dictate the near trend.”

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Felix J. Dixon