In the last trading session of FY2022-23, shares jumped more than 1.5%, propelled by gains in overseas markets and an aggressive year-end buying. The over 1,000-point surge in the Sensex helped soothe the investor pessimism on multiple fronts, thus bringing relief to a sombre market.
Data show that the financial year saw erosion of Rs 5.86 trillion in investor wealth. This was during an otherwise flat year, in which the Sensex edged up 0.7%.
Index heavyweight Reliance Industries (RIL) maintained its pole position in the table, despite witnessing a Rs 2.04-trillion decline in market capitalisation — from Rs 17.81 trillion to Rs 15.77 trillion.
The stock closed the year at Rs 2,331, down 11.5% from Rs 2,634 on March 31, 2022. However, RIL shares gained 4.3% on the final day of FY23, following the announcement of a board meeting on May 2 to take up the demerger of its financial services operations.
Bellwether IT company TCS ranked second, with peer Infosys at sixth. The tech space underperformed for the major part of the year, largely on account of overseas clients cutting down on spends.
“Rising manpower cost came as a challenge to the IT sector at a time when companies were struggling to retain talent. In addition, the fear of recession in the US and Europe led to questions being raised on order inflows, a challenge that could remain for some time even this year,” said Ambareesh Baliga, an independent market analyst.
Recent months also saw the consumer segment being bitten by the slowdown bug, induced by inflationary pressure and rising interest rates. Defying the trend, ITC broke into the top 10 by market value, while Bajaj Finance exited the table. The Bajaj unit lost nearly Rs 1 trillion in value and begins FY24 ranked 14th.
ITC saw a 52% jump in its stock, from Rs 251 to Rs 383, over the year, with a Rs 1.67-trillion change in the market cap. A March report by Motilal Oswal Investment Services said the conglomerate has braved the slowdown impact thanks to an accelerated earnings growth over the past two years (especially FY23), coupled with a strong earnings visibility in FY24. A strong uptick in business for the hospitality sector is seen further aiding its hotels business.
A healthy growth in cigarette volume during recent quarters is seen sustaining, leading to the best three-year and four-year average volume growth rates for over a decade. Further, the Union Budget not going for a substantial tax hike comes as a shot in the arm.
Banks, however, stayed strong in an eventful year that saw not only multiple rate hikes, but also their foreign counterparts going under.
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Three of the top 10 companies by value were banks — HDFC Bank (third), ICICI Bank (fourth), and SBI (ninth). A clean-up in the balance sheets and strong credit offtake allowed the focus to shift towards growth, thus keeping the banking sector resilient, say analysts covering the sector.
The movement in the indices was, for the larger part of the year, dominated by themes like the rising interest rate regime and geopolitical conflicts, before Hindenburg’s report on Adani Group firms earlier this calendar year caused a bloodbath on the indices.