Indian stock markets may have stumbled since the onset of the West Asia crisis, but beneath the surface, a surprising resilience persists. Nearly half of the BSE 500 stocks—accounting for about 87% of total market capitalisation—have delivered positive returns over one-, three- and five-year periods.
Data collated by FE shows that 225 stocks in the BSE 500 have posted gains over the past year, with average returns at a robust 28%. The picture looks even stronger within narrower indices: 55 stocks in the BSE 100 and 103 in the BSE 200 are in the green over the same period.
Long-Term Alpha
The trend becomes more pronounced over longer horizons. In the BSE 100, as many as 90 stocks have delivered positive returns over three years and 89 over five years. For the BSE 200, the numbers stand at 166 and 163, respectively. In the broader BSE 500, more than 350 stocks have gained over both periods. This comes even as the Sensex has slipped about 13% from its January highs.
Analysts attribute this divergence to strong earnings growth and sustained domestic inflows.
Pankaj Pandey, head of research at ICICI Securities, said robust earnings expansion—particularly among companies beyond the top 50—has been a key driver of returns over the past year. Another research head at a financial services firm pointed to strong participation from mutual funds, supported by steady retail inflows through systematic investment plans (SIPs).
SIP Shield
V Shunmugam, partner at MCQUBE, noted that India’s consumption story has so far remained intact, enabling consumer-facing companies to sustain earnings growth.
Looking ahead, Pandey expects the trend to largely continue. Other experts concur, arguing that unless there is a sharp uptick in redemptions or a significant slowdown in SIP inflows, the market’s underlying strength should hold.
Shunmugam, however, flagged risks over the medium term, warning that a prolonged disruption to global trade due to the conflict could weigh on the growth prospects of Indian companies.