Best and worst performing stocks of 2022

• India’s benchmark indices Sensex and Nifty50 managed to outperform most of the global markets in 2022.
• Driving the rally in Indian markets were stocks of companies from the Adani Group, banks, oil & gas and the FMCG sectors.
• On the other hand, the IT and new-age companies witnessed a decline in 2022.

India’s benchmark indices Sensex and the Nifty50 have been amongst the best performers this year when compared to the major stock markets of the world, with gains of nearly 5% till date. Driving the rally were stocks across key sectors like bank, oil & gas, fast moving consumer goods (FMCG) and public sector enterprises.

The top ten best performing stocks in the Nifty100 universe includes Adani Enterprises and Adani Transmission, which have also emerged as the leading all-round wealth creators between 2017-22, according to a Motilal Oswal report.

Adani Group stocks dominate

Overall, there are four Adani Group companies figuring in the list of the top ten best performing stocks in the Nifty100 this year, with their share prices gaining between 54-135%.

Other top-performing stocks this year include Hindustan Aeronautics, a state-owned aerospace and defence company, which reported a 44% rise in its Q2 FY23 profit to ₹1,221 crore and a strong order book of nearly ₹8,400 crore.

Coal India is another public sector company making it to the list with gains of 58% as the company benefited from rise in domestic coal demand.

Overall, the oil and gas sector witnessed a drastic expansion in its gross margins to 19.6% in FY22 from 3.4% in FY21, and estimated to only slightly contract to 16.1% in FY23, according to Motilal Oswal.

Best and worst performing stocks of 2022 on the Nifty100

On the other hand, IT stocks and new-age companies dominated the list of the worst performers in 2022 in the Nifty100 universe.

Topping the list is One 97 Communications, the Paytm operator, with a 62% decline as it battles Google Pay and PhonePe on one side (in terms of UPI payments), and the upcoming challenge from Mukesh Ambani’s Jio Financial Services, which could emerge as the fifth largest financial services company in India in terms of net worth, upending Paytm’s financial services business.

Other notable losers in the year include Zomato, Nykaa operator FSN E-Commerce, and IT companies Wipro, Tech Mahindra, Mphasis and LTIMindtree.

Interestingly, research firm Jefferies has Zomato amongst its top picks, calling it an “unloved stock” and that its valuation is now justified after the stock has seen a 60% correction from its peak.

“We also see a consistent improvement in profitability in food delivery despite a strong 30% compounded annual growth rate over FY22-25E,” said a Jefferies report.

What’s in store for 2023?

Analysts recommend investors exercise caution in 2023 when it comes to Indian equity markets.

“We expect weakness in tech stocks to continue on account of weak growth outlook. FMCG stocks are expected to do well on the back of fall in commodity prices and improving demand," said Siddhartha Khemka, head - retail research, Motilal Oswal.

Analysts at Jefferies believe that the Nifty50 will remain range-bound between 18,000-19,000 in 2023.

“With India among the best performing markets globally in 2022 and hitting new highs recently, valuations at 20x PE and 225 bps on yields gap are trending above 1 standard deviation levels, and remain a key overhang for market performance in 2023,” said Mahesh Nandurkar, head of research at Jefferies.

Overall, the research firm says it is “overweight” on stocks in the telecom, consumer staples and discretionary, real estate and utilities sectors. It remained “neutral” on the financial services sector, and stated it is “underweight” on IT, energy, healthcare and materials sectors.


SEE ALSO:

Two Adani Group companies rule as the top all-round wealth creators – here are a few other unexpected entries

Festive baton shifts to Great Indian Wedding Season, November registers best-ever auto sales, except March 2020: FADA

RIL, Adani Enterprises are the biggest and most consistent wealth creators: Motilal Oswal