Retail-heavy stocks witnessed mixed performance in 2024, with some delivering impressive returns while others underperformed. Here’s an analysis of how popular retail-focused stocks fared:
Top Performers
- IREDA (Indian Renewable Energy Development Agency Ltd)
- Performance: Gained 115% in 2024, emerging as the top performer.
- Sector: Renewable Energy.
- Suzlon Energy Ltd
- Performance: Rose 72% in 2024.
- Bharat Electronics Ltd (BEL)
- Performance: Up 70%.
- Indian Railway Finance Corporation Ltd (IRFC)
- Performance: Gained 64%.
- JIO Financial Services (JFS)
- Performance: Climbed 30-45%.
Underperformers
- YES Bank Ltd
- Performance: Declined 1.16%.
- Retail Ownership: 61.56 lakh retail investors, holding 22.44% of the stake.
- Tata Steel Ltd
- Performance: Increased 8.13%, lagging behind the Sensex’s 11.76% return.
- Outlook: Analysts expect global steel prices to remain under pressure, impacting future performance.
- Tata Motors Ltd
- Performance: Gained only 0.7% YTD.
- Concerns: Weak average selling prices and rising marketing expenses despite a strong product mix.
- IDFC First Bank
- Performance: Dropped 27%, the worst among the top 20 retail-heavy stocks.
- ITC Ltd
- Performance: Delivered flat returns.
Insights on Retail Investor Behavior
- Narrative Stocks
- Stocks like RVNL, IRFC, NHPC Ltd, NTPC Ltd, IOC, Tata Power, and Bharat Electronics are classified as “narrative stocks” by Kotak Institutional Equities.
- Retail investors have become the largest non-promoter group in these stocks, driven by past high returns.
- Warning: Kotak cautioned about potential sharp corrections in these stocks due to herd behavior.
- Sector-Wide Trends
- Energy Sector: Renewable energy stocks like IREDA and Suzlon performed exceptionally well.
- Banking Sector: Large-cap banks like State Bank of India and Punjab National Bank delivered solid returns, outpacing Sensex performance.
Stocks with Moderate Performance
- Tata Power Company
- Performance: Gained 30-45%.
- Infosys Ltd, Oil & Natural Gas Corporation Ltd (ONGC), NTPC Ltd
- Performance: Managed to beat Sensex returns.
- Indian Oil Corporation Ltd, HDFC Bank Ltd, Tata Steel Ltd, Tata Motors Ltd
- Performance: Delivered up to 9% returns.
Analyst Recommendations
- Kotak Institutional Equities: Warns retail investors against over-reliance on past returns for “narrative stocks.”
- YES Securities: Maintains a “neutral” stance on Tata Steel, citing concerns over subdued global steel prices.
Conclusion
2024 has been a mixed bag for retail-heavy stocks, with renewable energy and infrastructure sectors leading the charge, while traditional sectors like steel and banking showed varied performances. Retail investors are advised to exercise caution, particularly in overvalued “narrative stocks,” and focus on diversification and long-term strategies.
Disclaimer: The information provided in this article is for informational purposes only and should not be considered investment advice. Investors are encouraged to consult a financial advisor before making any investment decisions.
