Even if you pick good companies, most of them won’t beat the market index. Only a small slice of stocks lift the Nifty 500, making stock‑picking tougher than it looks.
The Nifty 500 is weighted by market‑capitalisation. That means the biggest winners have a lot of influence on the index, while the many smaller stocks have little effect. The median (middle‑of‑the‑pack) stock usually lags behind the index.
We looked at rolling three‑year windows. The chance of beating the index fell to about 42%. Only three out of eighteen periods had more than half the stocks beating the index.
The biggest performers are extreme outliers. Over 3‑year periods they delivered:
These numbers are ex‑post – they assume you knew the winners in advance.
After a stock beats the index for one three‑year spell, only about 47% repeat in the next three years, and just 22% keep winning in the following three‑year stretch.
From the 500 stocks that made the list in 2007, only 43% remain today. The index continuously adds fast‑growing companies and drops those that shrink or disappear, acting like an automatic momentum strategy.
The index isn’t a weak opponent. It benefits from a few spectacular stocks while quietly removing the weak ones. Active pickers must respect how difficult it is to capture those outliers, and plan their portfolios accordingly.
Remember, this is just perspective, not a prediction. Do your own research and consider your own risk tolerance before making any investment decisions.
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Join TelegramHCL Technologies delivered better‑than‑expected results, with revenue growing 4.2% quarter‑on‑quarter and a massive $3 billion deal signed, pointing to a stronger growth path. Revenue beats expectations The company posted a 4.2% QoQ increase in revenue, outpacing analysts’ estimates of 2.2%–2.8%. Growth was driven by its software products business, supported by seasonal demand and steady performance in engineering R&D and IT services. Big deal adds $3 billion to the pipeline HCL announced total contract value (TCV) of USD 3 billion, up 17% from the previous quarter and 43.5% year‑on‑year, with the highest ever annual contract value (ACV) component. The trailing‑twelve‑month TCV grew 21% YoY, positioning HCL to possibly post the fastest growth among large‑cap peers in FY27. Future opportunities While traditional discretionary spending is slowing, the firm sees new growth pockets in managing AI infrastructure and providing AI engineering services. Analyst view Rating: Hold Target price: INR 1,590 Valuation: 21× forward P/E for services, 18× for products Remember, this is perspective, not a prediction. Do your own research and consider your risk tolerance before making any investment decisions.
Auto shares have dropped for the fifth day in a row, pulling the Nifty Auto index down about 0.7% to 27,817. Here’s a simple rundown of what’s happening and why it could matter to you. Current Market Snapshot At 12:15 pm on Tuesday, the Nifty Auto index was down more than 3% over the past five trading sessions. The broader market weakness has led to profit‑booking and some worries about demand, but the sector’s fundamentals remain intact. Key Losers and Gainers Top losers (down >1%): Tube Investments of India – around 2% lower Exide Industries Uno Minda Maruti Suzuki Mahindra & Mahindra (M&M) TVS Motor Company Other notable decliners: Tata Motors Passenger Vehicles, Hero MotoCorp (≈ 1% each), Ashok Leyland, Eicher Motors. Gainers (small upside): Sona BLW Precision Forgings Bosch Bajaj Auto Bharat Forge Samvardhana Motherson International Analyst Views Analysts say the recent dip is more about short‑term profit taking than a fundamental break‑down. Siddharth Maurya (Vibhavangal Anukulakara) – “Near‑term profit booking, not a structural issue.” Harshal Dasani (INVasset PMS) – “A consolidation phase; medium‑term outlook stays positive thanks to policy support and demand tailwinds.” Tushar Badjate (Badjate Stock & Shares) – “The index has already rallied ~40% from its March 2025 low, so the correction is mainly valuation rationalisation.” What Could Trigger a Turnaround? Several factors could help the sector stabilize and move higher: Potential GST rationalisation on automobiles. Expectations of interest‑rate cuts, lowering financing costs for buyers. Income‑tax relief that puts more money in consumers’ hands. Government focus on manufacturing, electric‑vehicle (EV) adoption, and new infrastructure. The proposed 500% U.S. tariff on some auto parts is unlikely to hurt Indian manufacturers directly, because India’s auto exports to the U.S. are modest. The impact would be limited to a few ancillary suppliers. Is This a Buying Opportunity? Most analysts agree the dip offers a chance to re‑evaluate positions: Focus on companies with strong product pipelines, export visibility, and growing EV exposure. Consider sector leaders that have shown relative strength, such as Bajaj Auto, Eicher Motors, TVS Motor, M&M, and Maruti Suzuki. Maintain a selective approach and be ready for short‑term volatility while the earnings season unfolds. In short, the auto sector’s long‑term drivers—policy support, rising disposable income, and the shift to electric vehicles—remain solid. The current pull‑back could be a good entry point for patient investors. Takeaway While auto stocks are under pressure today, the fundamentals that fuel growth are still in place. Watch for policy cues, financing cost changes, and earnings results to time any new positions.
India’s recently introduced labour codes are set to increase the cost of employing staff in the IT sector, putting extra pressure on company margins and lowering profit expectations for the next few years. What the new labour codes require Effective from November, the rules state that an employee’s wage must be at least 50% of the total cost to company (CTC). Benefits like provident fund and gratuity will now be calculated on the wage component, not the full CTC. How this adds to IT company costs Because of the new definition of wages, IT firms will see a rise in recurring employee expenses. Analysts estimate that a 2% rise in Indian staff costs could cut FY27 earnings estimates by 2‑4% for these companies. Companies may try to offset part of the hit by limiting salary increases, especially for senior staff. Impact on major IT firms HCLTech posted an 11.2% drop in net profit for the Oct‑Dec quarter, mainly due to a one‑time provision of about ₹900 crore linked to the labour codes. Without this one‑off item, profit would have been higher. Tata Consultancy Services (TCS) saw a 13.9% profit decline for the same period. A statutory impact of ₹2,128 crore from the new rules was recorded; excluding it, profit would have grown about 8.5%. What this means for investors Margins for Indian IT firms are likely to be squeezed in FY27‑28 as they adjust to higher payroll costs and slower revenue growth from shifts toward AI‑driven services. Keep an eye on salary hike trends, especially at senior levels, and watch how companies manage the one‑time provisions. Disclaimer Remember, this is perspective, not a prediction. Do your own research and consider consulting a certified financial adviser before making any investment decisions.