Over the past 12 months, the Nifty 50 has risen by a muted 0.78%, weighed down by India’s inflated valuations and uncertainty over US tariffs, which triggered sharp withdrawals from overseas investors.
The index’s performance has been the weakest among Asian peers, many of which have hit multiple record highs and delivered double-digit returns.
Compared to US and European markets, the Nifty 50 has also underperformed, dragging India’s share of the global market to a two-year low in September.
Over the last 12 months, the global market cap has increased 15.6% to $19.5 trillion, whereas India’s market cap declined 10%, bringing its share of global market capitalisation down to 3.5%.
Though the Nifty 50 remained lower in comparison with key global markets, it is on track for its 10th straight annual gain, thanks to sustained buying by domestic institutions.
Bajaj Finance leads with 47% rally, Eicher Motors up 44%
Amid a series of headwinds, some Nifty 50 constituents have bucked the trend and delivered sharp returns, emerging as shining stars in an otherwise lackluster market, with gains ranging between 20% and 47%. Bajaj Finance topped the list, rallying 47% over the past year and breaking multiple record highs.
Eicher Motors was another big gainer, up 44% during the same period and on track for a seventh consecutive annual gain. The stock hit multiple record highs, the latest being ₹7,122 in late September.
Though it experienced volatility, Bharat Electronics shares surged 43% to ₹408 over the year, and if momentum continues, it could mark its seventh consecutive annual gain.
Maruti Suzuki India rewarded shareholders with a 30% gain, maintaining a consistent upward run over six months. The stock crossed ₹16,000 to hit a fresh record high of ₹16,435, joining the ₹5 lakh crore market capitalization club.
Recent entrants Eternal (formerly Zomato) and InterGlobe Aviation also impressed. Eternal, entering the Nifty 50 recently, gained 26.5%, pushing its market capitalization past many tech peers. InterGlobe Aviation, which joined the index in late September, delivered a 25.3% gain and is on course for a third consecutive year of growth.
Max Healthcare Institute, which entered alongside Indigo, returned 22% to shareholders. Meanwhile, ten other stocks, including Bajaj Finserv, Kotak Mahindra Bank, State Bank of India, HDFC Bank, and Bharti Airtel, posted gains of 10-16%.
Analysts remain confident in India’s long-term story
The sharp underperformance of the Nifty 50 has brought valuations to more comfortable levels, while expectations of a consumption revival, driven by GST cuts and lower interest rates, have lifted hopes that earnings recovery will pick up in the second half of FY26.
SBI Securities believes this underperformance could reverse in Samvat 2082, supported by recovering earnings, a GST-led consumption boost, a pickup in capex, strong macro fundamentals, and attractive valuations. The brokerage expects these factors to help Indian equities shed their underperformer tag in the coming year.
Motilal Oswal notes that the government is committed to supporting and stimulating the Indian economy amid global headwinds, weak private capex, and sub-optimal consumption. The latest GST reform is expected to be the first major structural reform of the government in its current term.
Axis Securities remains confident in India’s long-term growth story, supported by a favorable economic structure, rising capital expenditure, and the consumption boost. The brokerage believes these factors could potentially drive credit growth for banks, support double-digit earnings growth, and enable Indian equities to deliver strong double-digit returns over the next 2-3 years.