How boring stocks made D-Street investors richer since last Diwali

NEW DELHI: If you go by the sectoral performance on Dalal Street since last Diwali, then boring seems to be the new cool for investors. While many retail investors were obsessed with new-age and other tech stocks, smarter investors made money in boring sectors such as power, utilities and industrials.

Since the last Diwali celebrations held on November 4, 2021, BSE Power has been the top sectoral performer with a 33.7% rally, followed by BSE Utilities at 24%, BSE Industrials at 14.92% and BSE Capital Goods at 12.69%.

“The rally in these boring sectors was because of the revival in the capex cycle. After a long time, there has been capacity expansion in these sectors. The earnings visibility has improved. As all the macro factors are coming together, these sectors are going to benefit because of the uptick in the overall economic activity,” equity strategist Kranthi Bathini of Wealth Mills Securities told ETMarkets.


Besides Adani Group stocks, top gainers in the old economy sectors include the likes of ABB India, NHPC, Siemens, NTPC, NHPC, Elgi Equipments, Lloyds Steels, Shivalik Bimetal and Mazagon Dock Shipbuilders. Some of these stocks have doubled in the last one year.

Sanjeev Hota, Vice President - Head of Research at Sharekhan, said the investment thesis is backed by India’s multiyear economic upcycle advantage well supported by proactive government policies and reasonable valuation in certain pockets relative to earnings outlook.

Besides, continuing spends on infrastructure sectors from the government and gradual improvement in private capex cycle, and increasing shift in global sourcing are also breathing life in industrials & capital goods sectors, he said.

Analysts see more legs in the rally. “These stocks are not momentum stocks and may consolidate for some time before the next up move. They are stable and cyclical in nature,” Bathini said.

The future outlook for the next 3-5 years looks encouraging for the industrial and capital goods sector led by China+1 and Europe+1 strategy, coupled with domestic economic upcycle, government policies and India’s increasing importance in becoming a future export hub in manufacturing, analysts said.

On the other hand, tech and new-age stocks, which have caught the fancy of retail investors, have been the worst-performing lot since last Diwali. BSE IT index lost 17.67% while BSE Teck eroded 14.5% of investor wealth. Sensex has lost 3.58% during the period.

(With data inputs from Ritesh Presswala)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)