Analysis by YADNYA

INDIAN STOCK MARKET

(2010-2020)
A Decade of Moderate Growth

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Presentation Flow
Market Cap Growth from 2011 to 2020 Top performing IPOs
Market in last 10 years Sales Growth – Top 10 Performers
SENSEX EPS Growth PAT Growth – Top 10 Performers
Share of top 100 companies in Mcap Valuations – PE Ratio
Listing/Delisting in last 10 years Valuations Trend
Top 10 Companies by Market Cap Debt Analysis
Top 10 Companies by Returns ROE vs Returns
Stocks Crossovers in Last Decade – BSE 500 ROE Trend
Crossovers – Small cap to Large Cap
Crossovers – Mid cap to Large Cap
Crossovers – Large Cap to Mid cap
Crossovers – Large Cap to Small cap
New Entrants
Sector – No. of Stocks Changes
Sector Index Performance
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Learnings from the Report
• Markets give most of the returns in very short time. Majority of returns of
the decade came in 2014, 2017 and late 2020. Rest it was mostly flat.
• EPS growth of the decade has lagged. It was not a great year economically
for India with low GDP growths too
• Large Caps rule the market
• Lot of changes happen in 10 years, some of the favorite sectors in 2010
were out of favor in 2020 like Power & Crude Oil. Few new sectors like
Insurance entered the markets and owned it.
• There is a high correlation between PAT growth and Stock Gains.
• Some of the High Debt companies can give good returns too if they try to
reduce it like Tata Metaliks, Trident and Havells
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MARKET MOVE IN
LAST DECADE

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 Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Apr-16
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
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Currently, the total Mcap of Indian markets is around Rs. 1.9x10^14

Apr-18
Jul-18
Oct-18
Jan-19
Market Cap Growth from 2011 to 2020

Apr-19
Jul-19
Oct-19
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Market in last 10 years
120 Mcap to GDP Average
100
100
81 83
79 79
80 71
66 69
64
60 56

40

20

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Mcap to GDP is a valuation metric. The 10 year average of the metric is 75.
Currently the market seems to be overvalued

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SENSEX EPS Growth
SENSEX EPS
1600
1488 1499
1500
1400 1358 1357 1373
1333 1340
1300
1179
1200
1109
1100 1024
1000
900
800
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

EPS growth of SENSEX in last 10 years has been 6% (CAGR). As we will see later on,
earnings play a major role in stock’s performance
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Share of top 100 companies in Mcap
Top 100 Rest

100%
24 23 18 21 20
27 27 28 30
80% 35

60%

40% 76 77 82 79 80
73 73 72 70
65
20%

0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Currently, top 100 companies represents 73% share of the total Mcap of all the Indian
companies (listed)

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Listing/Delisting in last 10 years
Listing Delisting
450 418
400
350 319
311 311
300
250 242
213
200
147 146
150
116 124 106
97 101
100
50 31 38
23 19 23 24 25
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

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STOCK CHANGES IN
LAST DECADE

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Top 10 Companies by Market Cap
Sr.
Company Name Sector 2020_Mcap 2010_Mcap CAGR Returns
No.
1 Reliance Industries Ltd. Crude Oil 1,343,724 345,012 15%
2 Tata Consultancy Services Ltd. IT 1,098,773 226,950 17%
3 HDFC Bank Ltd. Bank 784,759 110,998 22%
4 Hindustan Unilever Ltd. FMCG 561,346 68,322 23%
5 Infosys Ltd. IT 536,878 198,241 10%
6 HDFC Ltd. Finance 462,587 106,584 16%
7 Kotak Mahindra Bank Ltd. Bank 395,019 33,557 28%
8 ICICI Bank Ltd. Bank 364,204 131,679 11%
9 Bajaj Finance Ltd. Finance 318,181 2,582 62%
10 Bharti Airtel Ltd. Telecom 281,016 136,464 7%

Bajaj Finance is a clear outlier among the top 10 stocks

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Top 10 Companies by Returns
Sr. No. Company Name Sector Returns (CAGR)
1 Avanti Feeds Ltd. FMCG 73%
2 Bajaj Finance Ltd. Finance 62%
3 Caplin Point Laboratories Ltd. Healthcare 61%
4 Vaibhav Global Ltd. Retailing 58%
5 Alkyl Amines Chemicals Ltd. Chemicals 55%
6 Astral Poly Technik Ltd. Plastic Products 54%
7 Tasty Bite Eatables Ltd. FMCG 54%
8 Deepak Nitrite Ltd. Chemicals 52%
9 PI Industries Ltd. Chemicals 51%
10 Ajanta Pharma Ltd. Healthcare 50%

Only Bajaj Finance was a mid cap company in 2011 while the rest were all small cap companies

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CROSSOVERS IN
LAST DECADE

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Stocks Crossovers in Last Decade – BSE 500

Year 2020 2020 2020

Market Cap Large Mid Small

2010 Large 55 37 8

2010 Mid 28 47 75

2010 Small 1 31 104

New Additions 16 35 64

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Crossovers – Small cap to Large Cap
Only one company was able to make the jump of Small cap to large cap from
2010 to 2020 – PI Industries

PI Industries is engaged in the manufacturing and distribution of agro chemicals.

In 2011, the company’s stock traded @ Rs.50 which is now around Rs. 2,100

The company witnessed a sales growth of 20%(CAGR) and a net profit growth of
27%(CAGR) in last decade.

For detailed analysis, Click here

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Crossovers – Mid cap to Large Cap

28 companies managed to jump from mid cap to large cap category in last
10 years.

The most popular among them are Bajaj Finance, Bajaj Finserv, Tech
Mahindra, Divis Lab, Britannia and Eicher Motors.

Bajaj twins and Eicher motors have been among the top performers
witnessing a growth of 62%(Bajaj Finance), 35%(Bajaj Finserv) and
35%(Eicher Motors) in last decade.

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Crossovers – Large Cap to Mid cap

37 companies that were a part of large cap category are now in mid cap.

Some popular names include: Thermax, Bank of India, Exide Industries, Oil
India, JSW Energy, BEL, NHPC and SAIL

Most of the other companies in the list are also capital extensive

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Crossovers – Large Cap to Small cap

8 companies spiralled down to small cap from large cap category.

National
Mangalore
Aluminum NLC India IDFC Ltd.
Refinery
Company

Hindustan Suzlon Energy Engineers

MMTC Ltd.
Copper Ltd. India Ltd.

As you can see, most of the companies are capital Intensive and 6 out of 8 are
PSUs

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New Entrants

In 2020, there were 16 Similarly, there were 35 new

companies in the top 100 list additions in mid cap category
which were listed after 2010. and 64 in small cap.

Most of these companies (HDFC V-Mart Retail, Muthoot Finance

Life, ICICI Lombard, Bandhan and LTI were the most successful
Bank, ICICI Pru, SBI Life) belong companies among the 125 new
to the BFSI sector. entrants.

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SECTOR CHANGES IN
LAST DECADE

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Sector – No. of Stocks Changes
Sectors No. of BSE 100 Stocks (Dec-20) No. of BSE 100 Stocks (Dec-10)
FMCG 11 6
Pharma & Healthcare 11 8
Bank 9 13
Automobile & Ancillaries 8 9
Finance 8 5
IT 7 6
Chemicals 6 2
Crude Oil 4 7
Power 4 8
Insurance 4 0
Construction Materials 3 3
Non - Ferrous Metals 3 5
Inds. Gases & Fuels 3 1
Telecom 2 2
Iron & Steel 2 4
Diversified 2 1
Realty 2 1
Trading 2 2
Mining 2 2
Capital Goods 2 7
Infrastructure 1 2
Retailing 1 0
Diamond & Jewellery 1 1
Logistics 1 2
Aviation 1 0
Media & Entertainment 0 2
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 Sector Index Performance
2010 2020 CAGR 2010 PE 2020 PE

Pharma &
2859 7631 10.3% -* 39.8
Healthcare

Bank 11855 31225 10.2% 20 30.1

FMCG 9424 34391 13.8% -* 44.5

Auto 4213 9272 8.2% 22 305

Finance 4763 15184 12.3% 24.5 30.8

IT 7492 24456 12.6% 29.3 33

* Data Not Available ©2021 Copyright of Yadnya Academy Pvt. Ltd. | Redistribution Prohibited
Top performing IPOs
Company Name Sector IPO Return (x Times Growth)

V-Mart Retail Ltd. Retailing Feb-13 7.6

Muthoot Finance Ltd. Finance May-11 4.2
Avenue Supermarts Ltd. Retailing Mar-17 3.0
TeamLease Services Ltd. Miscellaneous Feb-16 3.0
Larsen & Toubro Infotech Ltd. IT Jul-16 2.6
Aavas Financiers Ltd. Finance Oct-18 2.6
Future Consumer Ltd. Trading May-11 2.4
Fine Organic Industries Ltd. Chemicals Jul-18 2.4
L&T Finance Holdings Ltd. Finance Aug-11 2.3
as on Dec 20
The returns are based on their listing price, i.e. had you invested Rs. 100 in V-Mart on the day it was
listed, your investment in 2020 would have Rs. 760

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COMPANY FINANCIALS
CHANGES

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Sales Growth – Top 10 Performers
Rank Company Name Sales CAGR Stock Return (CAGR)
1 Bajaj Finserv Ltd. 49% 35%
2 Avanti Feeds Ltd. 46% 73%
3 Bajaj Finance Ltd. 40% 62%
4 Aegis Logistics Ltd. 37% 24%
5 Sunteck Realty Ltd. 36% 4%
6 Phoenix Mills Ltd. 32% 16%
7 Sun Pharmaceutical Industries Ltd. 31% 11%
8 Aurobindo Pharma Ltd. 29% 21%
9 Vedanta Ltd. 29% 7%
10 Gujarat State Petronet Ltd. 29% 6%

The table represents companies with highest sales growth in 2011-20.

We can observe that there is a strong positive correlation between sales growth and stock returns
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PAT Growth – Top 10 Performers
Stock Return
Rank Company Name 2020_PATM 2010_PATM PAT_CAGR
(CAGR)
1 Bajaj Finance Ltd. 20% 10% 50% 62%

2 IOL Chemicals & Pharmaceuticals 19% 3% 43% 44%

3 Caplin Point Laboratories Ltd. 25% 7% 42% 61%

4 PVR Ltd. 1% 0% 42% 34%

5 Deepak Nitrite Ltd. 14% 3% 41% 52%

6 La Opala RG Ltd. 31% 4% 41% 42%

7 Maharashtra Scooters Ltd. 1170% 188% 36% 25%

8 Cholamandalam Investment Ltd. 12% 6% 35% 31%

9 TVS Motor Company Ltd. 3% 1% 35% 21%

10 KEI Industries Ltd. 5% 1% 34% 36%

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PAT Growth

Earnings (Profit after tax) is the Thus, bottom line analysis

back bone of a company’s becomes extremely important
financial health. while selecting a company.

The correlation of PAT growth We also see a significant

with stock returns of the top 500 increase in PATM from 2010 to
companies is around 0.65 which 2020 of the top performing
is quite strong. stocks.

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Valuations – PE Ratio
Returns
Sr. No. Company Name 2010_PE 2020_PE
(CAGR)
1 Reliance Industries Ltd. 16.2 32.1 15%
2 Tata Consultancy Services Ltd. 25.6 38.8 17%
3 HDFC Bank Ltd. 27.3 26.3 22%
4 Hindustan Unilever Ltd. 26.8 78.8 23%
5 Infosys Ltd. 27.1 30.8 10%
6 Housing Development Finance Corporation Ltd. 22.6 29.3 16%
7 Kotak Mahindra Bank Ltd. 21.5 40.8 28%
8 ICICI Bank Ltd. 21.0 26.9 11%
9 Bajaj Finance Ltd. 10.4 65.5 62%
10 Bharti Airtel Ltd. 23.6 - 7%
Valuation analysis is difficult as it is industry specific, hence we have mentioned the PE of top 10
companies by Mcap which indicates that good companies manage to give decent returns
irrespective of their valuations
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Valuations Trend
PE Ratio (BSE 500)
35
30.0
30
26.6 25.9
24.3 24.7
25
21.0
20 17.7 18.4 18.0
15.7
15

10

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

The graph clearly indicates that valuation of the market is currently at its highest.
(PE ratio for the month of January is 39)
Note: PE of 2020 should also consider the reduced Earnings due to Covid
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Debt Analysis
Sr. No. Company Name Mcap 2010_D/E 2020_D/E Stock Returns (CAGR)
1 Bombay Dyeing 1,605 8.4 47.7 -2%
2 Wockhardt Ltd. 2,601 6.0 1.2 4%
3 Tata Metaliks Ltd. 1,745 4.7 0.2 18%
4 Tata Motors Ltd. 56,961 4.4 1.9 -2%
5 Jindal Stainless Ltd. 1,903 4.2 1.5 6%
6 Alok Industries Ltd. 412 3.9 -2.4 18%
7 Fortis Healthcare Ltd. 10,048 3.8 0.2 7%
8 Trident Ltd. 3,419 3.4 0.6 30%
9 MMTC Ltd. 2,820 3.3 4.2 -28%
10 Welspun India Ltd. 4,943 3.2 1.2 29%
11 GMR Infrastructure Ltd. 12,585 3.1 -14.0 -1%
12 Adani Enterprises Ltd. 22,860 2.9 0.7 -3%
13 Havells India Ltd. 40,674 2.7 0.0 28%
14 TV18 Broadcast Ltd. 3,643 2.6 0.5 9%
15 Rain Industries Ltd. 3,352 2.5 1.6 14%
16 Dish TV India Ltd. 2,362 2.5 0.5 -11%
17 Ashoka Buildcon Ltd. 2,893 2.4 15.1 5%
18 Tata Steel Ltd. 56,323 2.4 1.6 2%
19 Britannia Industries Ltd. 73,120 2.3 0.4 33%
20 Power Grid Corporation Of India Ltd. 102,251 2.3 3.0 8%
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Debt Analysis
The Debt table represents the companies with highest (top 20) DE ratio in
2010.

Tata Metaliks, Trident, Havels, Welspun and Britannia are outliers, who despite
having high DE ratio performed well.

This was because their management was focused on reducing their debt which
can be seen from their 2020 figures.

Thus, only companies which had high DE ratio in 2010 AND were unable to
reduce it in last 10 years have performed poorly on stock market.

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ROE vs Returns
Sr. No. Company Name ROE_ Avg Returns (CAGR)

1 Hindustan Unilever Ltd. 92.1 23%

2 Castrol India Ltd. 79.9 1%

3 Colgate-Palmolive (India) Ltd. 78.0 14%

4 Hawkins Cookers Ltd. 59.8 16%

5 Nestle India Ltd. 57.8 17%

6 Page Industries Ltd. 52.6 34%

7 Britannia Industries Ltd. 46.0 33%

8 VST Industries Ltd. 41.4 20%

9 Hero MotoCorp Ltd. 40.8 5%

10 CRISIL Ltd. 39.6 12%

ROE is an efficiency metric.

The table represents companies with highest ROE avg. along with their 10 Yrs stock returns.
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ROE vs Returns
ROE Returns
X>40 18%
30<x<40 25%
20<x<30 21%
10<x<20 13%
<10 6%

There seems to be a weak correlation between ROE and share returns

(= 0.3) – especially for companies with high ROE.

However, as we can see from the table, Returns drop significantly when ROE falls
below 10%.

Note that ROE is an Industry specific parameter. Thus Investment decisions cannot
be taken solely on this parameter.
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ROE Trend
Most businesses are cyclical in character. However, most of them do well when the
economy is on the upswing. Thus, at the peak of an economic boom most sectors record an
ROE>13%. Nonetheless, for the last 7 years, that number is down to between 7 and 11.

ROE>13 ROE<13
100%

80% 15
20
24 26 26 26
60% 27 27 27
30

40%
22
20% 17
13 11 11 11
10 10 10
7
0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

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