The Outperformers 2014

Liquid optimism

With inflationary expectations under control, investors are banking on low interest rates

Illustration by Manish Marwah

Any monkey could have performed well where everything was going up as they were trading cheap and low. If your returns have come because of skill, you will still find opportunity but if it is pure luck and if you want to be lucky a second time, the casino would be a better choice than the stock market.” This is not the rant of a sore investor who has been stranded on the sideline by the blistering run up that has been underway for a year now in the Indian stock market. Instead, these words belong to the usually calm and serene sounding Nilesh Shah, chief executive of Axis Capital. When a veteran like Shah feels that the going in 2014 has been way too easy, it must surely have some element of truth in it. And the numbers bear that out to a great degree. Those who have invested in an index ETF over the past three to 15 months are sitting on 11% to 50% return. Even those who got in late in May 2014 are now sitting on a 25% return. 

Bears or any semblance of bearishness has been steamrolled in this runaway rally which can be divided into pre- and post-Modi. For those who stayed invested in late 2013 and have held on for most of 2014, it has been nothing short of a dream run. The base building for this uptrend began soon after the rupee bottomed out in the last week of August, 2013. Hence, that has been chosen by us as the starting point for listing the outperformers. Stock-specific returns for many companies are off the charts and for many sectors; the outperformance was fortified in the catch-up rally that ensued once it became clear that a decisive mandate had come through. 

Though, every sector has seen a jump in valuation, the relative sector laggards pop up if one compares the present index levels to the highs reached during the frenzy of 2008 (see: Leaders and laggards). While the consumption and defensive sectors have left the highs of the 2008 euphoria in the dust and many a skeptic has been buried under the current market momentum, the BSE capital goods and metals indices have some way to go before they register new highs. When t


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