Share Market Predictions and Reality
Share Market Predictions and reality – Guess what? It’s December, and that means people are trying to predict what the stock market will do next year. Morgan Stanley, for example, thinks the Sensex will reach 1,05,000 in 2025. But, they also predicted 86,000 for 2024, and that didn’t quite happen.
It’s hard to predict the future. Back in 1924, people thought food would be super expensive in 2024 – like you’d have to use a medicine dropper to drink milk and an egg would cost as much as a woman’s love. Yikes! So, at least Morgan Stanley is doing better than that.
Share Market Volatility in 2024
This year, the stock market was all over the place. Some types of stocks, like financial and industrial ones, did really well. But others, like auto and FMCG stocks, didn’t do so great. The economy started to slow down, and foreign investors started selling off their stocks, which caused a drop in September.
Share Market – A Potential Surge: 40%+ HUGE Upside for these STOCKS by FY26? Winners and Losers
Some companies did great in 2024, while others struggled. This led to different CEOs having different opinions about what 2025 will look like. For example, PB Fintech, one of the top winners, is feeling optimistic. But Asian Paints, one of the top losers, is being more cautious.
Why Some Companies Did Better Than Others
So, why did some companies do well while others didn’t? Let’s take a closer look at the top winners and losers in the Nifty 200 index.
The Battle Between Fundamentals and Valuations
Investors really care about a company’s financials, especially when the market is crazy. Companies with strong financials did really well in 2024, while those with poor financials struggled. Even after the market corrected itself, strong financials continued to drive stock performance.
But, some of the top gainers had really high prices, which could mean they’re at their peak or that investors don’t have better options. Let’s dig into the top winners and losers of 2024.
Top Gainers
These stocks did well because of their strong financials and the booming sector they were in.
Oracle Financial Services Software
Oracle is doing really well because banks are spending more money on technology. The top 5 banks in the US have increased their spending by 7% and are using something called GenAI. Oracle makes most of its money from selling product licenses, like Oracle FLEXCUBE Universal Banking.
In the second quarter of the financial year 2025, Oracle saw an 18% increase in revenue and a 38% increase in net profits. Its parent company in the US, Oracle Corp, is also doing better than big tech companies like Microsoft, Apple, and Salesforce this year.
PB Fintech
PB Fintech, the company that owns Policybazaar and Paisabazaar, is doing great too. They are now focusing on Unit Linked Insurance Plans (ULIPs) and have seen a 47% increase in revenue in the first half of the financial year 2025.
They are also making more money from new businesses like corporate insurance, an agent aggregator platform, and retail insurance in the UAE. They even got a special license from the RBI to help them grow even more.
Dixon Technologies
Dixon Technologies used to only make LED TVs, but now they make all kinds of electronics in India. They work with big companies like Xiaomi, Samsung, Apple, and more. Their revenue has grown by over 200% in the first half of the financial year 2025.
They are also benefiting from a government scheme called Production-Linked Incentive (PLI) and have seen their revenue go up a lot in just a short time.
Rail Vikas Nigam Ltd. (RVNL)
RVNL has won some important railway projects and is even working on projects in other countries like Saudi Arabia and Dubai. Foreign investors are interested in RVNL, but their revenue and profit have gone down in the first half of the financial year 2025.
People are starting to wonder if RVNL can keep up the good work and make more money in the future.
Cochin Shipyard
Cochin Shipyard is doing well because the government wants more ships and defence equipment made in India. They have a lot of orders for building and repairing big ships and aircraft carriers.
In the first half of the financial year 2025, Cochin Shipyard saw a 26% increase in revenue and a 30% increase in net profits. They have a lot of orders and proposals for more work in the future.
Top Losers
Vodafone Idea
Having Vodafone Idea in your portfolio feels like a recipe for heartburn. Each year, the company sees a rollercoaster of highs and lows, where brief moments of optimism are interrupted by more challenges. The company’s debt pile of over Rs. 2 lakh crore has been worsened by negative equity. From 22.75 crores in September 2023 to 21.25 crores in September 2024, its subscriber count has reduced year after year.
Brokers highlight that the financial position will become more vulnerable once AGR dues become payable from FY26 onwards. According to Kotak Institutional Equities, the company is staring at a cash shortage of Rs. 10,400 crore over FY25-27 and Rs. 74,000 crore during FY28-32.
IndusInd Bank
The banking sector faces pressures from rising stress in unsecured lending and microfinance portfolios. IndusInd Bank pushed microfinance loans aggressively in recent quarters, and these now account for 9% of IndusInd’s loan book as of September 2024. The gross NPAs in this segment have jumped from 5.16% in Q1FY25 to 6.54% in Q2FY25. That has led to a 39% YoY drop in net profit of Q2FY25.
The bank faces a long road to recovery. Although other banks are also stretched, the impact on credit costs for IndusInd is higher (140 bps vs. 50-60 bps), according to Macquarie Capital. Analysts expect microfinance stress to remain high even in Q3.
Asian Paints
A once-star consumer play is struggling with weak demand, rising raw material costs, and unseasonal rainfall, which have impacted the paint industry and affected revenues, margins and profits.
Rising competition within the paint industry has also eroded the market share of Asian Paints. Sales and profits have been declining year-on-year for the last three quarters. FIIs have been exiting from this stock gradually, from over 20% in FY22 to 17% in FY23 to 15% in September 2024.
Bandhan Bank
Despite impressive revenue growth averaging 22% YoY, Bandhan Bank’s asset quality problem has raised its ugly head again, with gross NPAs rising from 3.8% in Q4FY24 to 4.7% in Q2 FY25.
Impressive loan book growth has delivered over 30% YoY net profit growth in the last four quarters. However, weakness in its microfinance portfolio and governance-related issues have taken a toll on the stock prices. Recently, ICRA downgraded the non-convertible debentures (NCDs) to AA- from AA.
Adani Total Gas
Adani Total Gas saw a steady 5-10% YoY revenue growth over the past year. However, after four consecutive quarters of double-digit profit growth, the company’s Q2FY25 net profit increased by a modest 7%. Due to limited availability, the government has reduced the allocation of Administrative Price Mechanism (APM) gas to City Gas Distribution (CGD). Adani Total Gas has seen a 13% reduction in its allocations, which will affect its financials.
The controversies have also left it limping. The Hindenburg report and the US bribery case have negatively impacted Adani Group stocks, discouraging foreign investors. Foreign shareholding has declined from 17% in September 2022 to 13% in September 2024.
2024 was a sector story
In 2024, sectors such as insurance, chemicals, construction materials, FMCG and private sector banks have lagged the index, especially after recent market corrections. But sectors like durables, industrials, financial services, realty, healthcare, technology, and public sector banks have shown resilience and growth.
Improving capital expenditure spending has raised the growth outlook across some industries. A stronger US economy and the China plus one strategy has raised the export potential for Indian manufacturers in pharma, chemicals and IT. However, depressed demand and stagnant incomes have put pressure on consumer, microfinance and auto.
2025 comes with a new US administration, continuing chaos in the Middle East, and a new RBI governor. Can Sensex touch 1,05,000 next year, or will the predictors be crying into their cups? We shall see.
Stay tuned for more updates and insights on the stock market! For more insights on investing in the Indian stock market, check out resources like Moneycontrol and NSE India.
Disclaimer: This article is for informational purposes only and should not be construed as financial or investment advice.