5 Large-cap Stocks That Beat Nifty50 Over 3 Months

The stock markets attract numerous investors everyday, most of whom hope for quick profits. 

Currently the markets in India are turbulent, some days they are charged upwards and on some others they take a backseat. Constantly changing investor sentiments and news such as the Adani-Hindenburg issue keep triggering reactions from the markets. The Budget 2023 announcement too saw some reaction as Sensex and Nifty climbed up following growth oriented measures that drove positive sentiments across the country.

The most recent news that has further triggered swings in the market is the RBI interest rate hike. As both inflation and interest rates seem to have peaked out and will hopefully see a downward trajectory, the overall market sentiment is positive. 

Considering such a volatile market scenario, here we share the Top 5 stocks that have outperformed Nifty 50 in the last 3 months starting Nov 4th to 6th Feb, 2023.

Criteria for stock selection 

Before sharing the stock names, these are the 3 criteria used for stock selection:

1. Companies which are party of Nifty50 index
2. Large cap companies with market cap over Rs. 20,000 crores
3. Out of these, we’ve picked Top 5 stocks that have beaten the Nifty50 index with their 3-month price performance.

Britannia Industries Ltd.

Britannia stock price vs Nifty50 index –

Established in 1918, today, Britannia Industries Ltd is India’s leading food industry player with a 100-year old legacy. The company has become a part of most Indian households today. Wadia group lead Britannia Ltd boasts of 5 million retail outlets in India.

Company’s product portfolio mainly includes:

• Bread
• Biscuits
• Cakes
• Dairy products
• Rusk

Some of the companies top brands include – Marie, Good Day, Jim Jam, Tiger, and Nutrichoice. The company focuses on both aspects – maintaining quality of current products and expanding product range. 

Financial performance 

Company recently announced its Q3’22 financial results. The key highlights include:

• At Rs 4,101 crores, year on year growth in revenue from operations is 16%
• Year on year growth of 55% in operating profits – Rs 760 crores
• Consistent growth in market share 
• EBITDA (Earnings Before Interest Depreciation Amortization) down 8.1% at Rs 722.27 crore vs Rs 538.74 crore.

The main drivers of the company’s positive results and growth are smart pricing, well-managed distribution and ever-evolving marketing strategies.

Future prospects

The company may continue being an FMCG leader in India powered by its additional growth initiatives and strong liquidity position.  However, the company EBIDTA margin may be under pressure in the near future because of high wheat prices driven by global inflation. 

Tata Steel Ltd.

Tata Steel stock price vs Nifty50 index –

In the last 3 months, Tata Steel stocks have given close to 12.10% returns to investors.

Tata Steel is India’s multinational steel manufacturing company which also happens to be one of the largest steel producers in the world with an annual production capacity of over 34 million metric tons. Established in 1907, this Tata Group owned company is operational in more than 100 countries. 

Financial performance

Here’s a look at the key highlights of company’s Q3’22 financial results:

• With volumes of 13.7 million tonne in the 9 months of 2022-23 financial year Tata Steel has delivered steady growth in India. 
• Revenue from operations dropped 6% Year on Year to Rs 57,084 crores.
• EBITDA was Rs 4,154 crores with an EBITDA margin of 7%

Reduced profitability is largely attributed to a sharp drop in earnings from Europe. This is further driven by the ongoing Russian-Ukraine war and the global economic slowdown.

Future prospects

After the initial inflationary pressures, global steel prices have started stabilizing combined with revival in demand from the Chinese economy. Domestic competition too does not pose a major challenge for Tata Steel as it is far ahead in terms of production capacity. Thus, the future prospects of Tata Steel look strong. 

Bharat Petroleum Corporation Ltd.

BPCL stocks have given investors close to 10.80% returns in the last 3 months. 

BPCL is an Indian government-owned oil and gas company. It is India’s largest oil refining and marketing company with an annual refining capacity of 38.3 million metric tons. 3 of the company’s major refineries are located in Mumbai, Kochi and Bina. 

The company’s operations come under the purview of the Ministry of Petroleum and Natural Gas. The Indian government currently holds a 52.98% stake in this company. In 2019, the government tried selling stake in BPCL through disinvestment, however, the plan was later scrapped.

Financial performance

• After reporting losses for 2 consecutive quarters, BPCL’s Q3 FY22 Consolidated net profits stood at Rs 1,747 crores. However, on a Year on year basis, this was a fall of 36.67%. 
• Company’s Revenue from Operations rose 13.48% Year on Year to touch Rs. 1,33,347 crores.

Oil marketing companies have been underperforming since the last few quarters because of static retail oil prices. Apart from this, volatile crude oil prices have also hurt the company’s margins. Costs related to import and refining of crude oil are getting difficult to recover for companies like BPCL.

Future prospects

Crude oil have once again started dropping after consecutive increases. This has resulted in  higher gross refining margins (GRM) for BPCL. GRM is the amount that refiners earn from turning every barrel of crude oil into refined fuel products.

Recently, the government announced a one-time grant of Rs 5,582 crores as compensation to cover BPCL’s losses in domestic LPG. 

HDFC Bank Ltd.

HDFC Stock price vs Nifty50 index –

HDFC bank is India’s largest private sector bank by asset size and market capitalization. The bank offers a wide range of banking services and its business segments are broadly divided into these categories:

1. Retail banking
2. Treasury services
3. Wholesale banking

On April 2, 2022, India’s housing major company HDFC announced merger with India’s banking major HDFC bank. This merger is likely to take effect in Q2 or Q3 of FY24. 

Termed as the biggest transaction in India’s corporate history, the deal is valued at about $40 billion. After the merger, the combined asset base of HDFC and HDFC bank will be Rs. 18 lakh crores. 

Financial performance 

Some of the key highlights of HDFC bank’s Q3 FY22 financial performance are:

• Consolidated net profits grew 19.9% Year on Year to reach Rs. 12,698 crores. 
• Net revenues also grew 18.3% to reach Rs 31,488 crores.
• At Rs 22,987 crores, Bank’s Net interest income (NII) also saw a 24.6% growth in Q3. NII is the difference between interest earned and interest paid. 
• At Rs 17,33,204 crores, bank’s Total deposits saw a healthy growth of 19.9%.
• CASA or Current Account Savings Accounts deposits saw 12% jump in Q3.
• Bank’s asset quality has also been consistently improving. This can be seen from the fact that its Gross non-performing assets (NPAs) dropped to 1.23% in Q3 FY22 versus 1.26% in Q3 of previous year. 

Future prospects

HDFC bank looks to be on a strong growth path. This is primarily seen from its improving asset quality, healthy capital ratios, growing deposits, and rapidly increasing number of branches with a special focus on Semi Urban and Rural branches.

HCL Technologies Ltd.

HCL Stock price vs Nifty50 index –

In the last 3 months, while Nifty50 Index has given -2% returns, HCL Technologies stocks have given investors nearly 9.60% returns. Let’s take a look at some of the key details about this IT giant.

This multinational IT services company operates in nearly 54 countries and has 3 main business segments hain –

1. IT and business services
2. Engineering and R&D services
3. HCL software

Financial performance 

HCL Q3 FY22 result highlights are as below:

• Consolidated revenue from operations rose by 19.61% to reach Rs. 26,700 crores.
• At Rs 4,096 crores, consolidated net profits saw a 20% Year on Year jump.
• Majority of revenues come from HCL’s IT and business services segment with 72% contribution. 
• HCL also won some strong deal in Q3. Here’s how the client metrics for Q3 looks like –
  • Added 17 – 100 Million dollar clients, 
  • Added 45 – 50 Million dollar clients, 
  • Added 130 – 20 million dollar clients 

Company’s management is optimistic about sustaining this momentum in the coming time period. With positive Q3 performance, HCL announced 2100% dividend amounting to Rs. 42 per share. That’s a 3.67% dividend yield on the company’s current share price. 

Future prospects

Considering the US recession fears and inflationary pressures this year, HCL’s performance may see some slowdown. To deal with the slowdown, the company has announced cutting down discretionary spending.

Conclusion

In conclusion, these were the top 5 stocks which outperformed Nifty50 index in the last 3 months. Investors can consider such large and stable companies to be included in their portfolios, especially during market turbulences like we are seeing this year. However, it is important for investors to conduct a detailed research of any company before investing in its stocks.

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