Nifty50 Sectoral Analysis: Which Sectors Are Driving The Market?

In this article, we will discuss,

The Nifty 50 Index fell by 0.6% in the financial year 2023. The year was marked by several challenges which impacted the global markets such as the Russia-Ukrain war, inflation, and rising interest rates across the world. Besides, the Hindenburg report on Adani led to a massive fall in the market between the January-March 2023 period.

Overall in FY 2023, the sectors that performed well were banks, FMCG, and auto while the sectors that dragged the overall Index down were metals, realty, IT, and media.

Nifty PSU banks Index rose by a whopping 36% and private banks by 11% in FY2023. Bank of Baroda, IDFC First Bank, Federal Bank, Punjab National Bank, and ICICI Bank lifted the Nifty 50 Index. Since banks constitute nearly a third of the Nifty weight, their performance has a huge impact on the index's overall performance. The FMCG sector rose by 26% and auto by 16%. ITC was the best performer in the FMCG space. The stock gained a record 62% in the last year. However, the global challenges impacted the IT and metals sectors which fell by 21% and 14%, respectively.  The fall in commodity prices impacted metals stocks. Nifty media and realty Index fell by 28% and 16%, respectively.

Nevertheless, the Index made a strong recovery in April 2023 and gained almost 4%, the highest monthly gain in 2023. The Index continued its run in May and is now just 3% away from its lifetime high of 18, index 887 points as on 22 May. Year-to-date from April 2023 to May 2023) the index gave a 5% return. The Index benefitted from several factors such as resumed FII buying in April and early May 2023, a fall in crude oil prices, a pause in interest rate hikes by US Fed, and positive earnings results in the March 2023 quarter. The significant jump in the Index performance was driven by a strong rally in the auto, banking, and realty sectors.

Table: Sector-Wise Performance of Nifty Indices

Indices Current level April to 25 May 2023
Nifty 50 18,321 6.0%
Nifty Realty 467 20.7%
Nifty Auto 14,029 14.6%
Nifty FMCG 49,295 8.6%
Nifty Bank 43,681 8.0%
Nifty Metals 5,872 7.5%
Nifty Fin Services 19,239 6.5%
Nifty Pharma 12,455 3.6%
Nifty IT 28,928 0.9%
Nifty Media 1,692 0.2%

From the above table, we can see that Realty and auto sectors have been outperforming Nifty by a wide margin. The realty sector has given the highest return of 20.7%. This was followed by the auto sector with a 14.6% return. FMCG, banks, metals, and financial services also gave higher returns as compared to Nifty 50.

Capital goods, metals, and healthcare sectors also outperformed. However, the Information Technology (IT) sector underperformed. Heavyweight sectors such as financials and the IT sector together constitute 51% of Nifty 50.

Nifty Realty

The Nifty Realty Index is designed to reflect the performance of real estate companies that are primarily engaged in the construction of residential and commercial properties.

Nifty Realty Index emerged as the top performer among all indices in April 2023. The Index surged 19.7% YTD from April to 25 May 2023. RBI's decision to pause rate hikes helped realty stocks. The robust sales posted by realty developers in the March quarter of the financial year 2022-23 (Q4FY23) also pushed up stock prices.

DLF has the highest weightage of 27% in the index. Shares of the real estate major have had a great run on the stock market, up by a significant 33.7% YTD in FY2023 after growing by 45% in the last financial year. The realty major reported Rs 15,000 crore (up 107% y-o-y) of pre-sales in FY23, leading to cash generation of Rs 2,500 crore (up 14% y-o-y) and reduced net debt by Rs 1,960 crore. The launch of The Arbour project alone drove sales of Rs 8,000 crore in the fourth quarter. DLF reported a 41% increase in consolidated net profit to Rs 570 crore in the March 2023 quarter against Rs 405 crore in the same period last year. Margins stood at 27.4% in the reporting period. In a month, the share has risen 11%.

Godrej Properties has the second-highest weightage of 15.4% on the Nifty Realty Index. The company's share price rose by 32% YTD during FY2023-24. The real estate developer saw its highest-ever quarterly and annual sales during the March 2023 quarter with pre-sales of Rs 4,000 crore, which is up 25 percent year-on-year.

Phoenix Mills' share price gained 14.2% YTD in FY 2023-24. Sobha Developers also posted its highest-ever quarterly sales of Rs 5,198 crore in March 2023, a rise of 31% compared to the corresponding period last year. Ajmera Realty's sales value increased by 10% sequentially to Rs 140 crore in Q4FY23. The company also said it achieved its best-ever sales performance in FY23, almost double that of the previous fiscal.

Nifty Auto

The CNX Auto reflects the performance of the Indian Automobiles sector, including manufacturers of cars & motorcycles, heavy vehicles, auto ancillaries, tires, etc. The CNX Auto Index comprises 15 stocks that are listed on the National Stock Exchange.

Nifty Auto has gained 14.6% since April 2023 till today (May 22), much better than Nifty's gain of 5%. Rising demand for autos, chip shortage, price hikes, new launches, and electric vehicles are factors favoring auto companies. Shares of auto companies also gained on robust FY2022-23 results.

Auto Stocks Pulling The Index Up

Tata Motors

Tata Motors gained 20.8% in April 2023 and was the top performer in the Index. The stock also gained 23% in Calendar Year (CY 2023) so far. The company reported a consolidated net profit of Rs 5,408 crore in the March 2023 quarter after having reported losses of Rs 1,033 crores in the March 2022 quarter. This was led by growing domestic demand, pricing actions, and easing supply chain issues. On a standalone basis, the company reported a net profit of Rs. 2,696 crore against Rs 413 crore in the corresponding quarter of the previous year.

Bajaj Auto

The stock gained 16% year-to-date in 2023 after giving 11% returns in 2022. The stock also touched its lifetime high of Rs 4,606 in May 2023. This is driven by continuous buying by the FIIs. The FIIs held a 12.4% stake in the company at the end of the March 2023 quarter, up from 10.5% in the March 2022 quarter.  High inflation had dampened rural demand for two-wheelers over the last couple of years. However, expectations of a revival in rural as well as international demand have been driving the stock prices higher. Besides, the company also plans to expand its electric vehicle portfolio which will also positively impact the earnings. The company has recorded a 2.5% year-on-year fall in profit at Rs 1,433 crore for the quarter ended March FY23 despite healthy topline and operating performance. Revenue for the quarter at Rs 8,905 crore grew by 11.7% over a year-ago period. EBITDA jumped 25.7% YoY to Rs 1,717 crore for the quarter. The company has announced a dividend of Rs 140 per share for FY23.

Maruti Suzuki 

Maruti Suzuki, the largest passenger vehicle manufacturer in India, saw a 12% jump in its stock price since April 2023. Maruti Suzuki shares gained as the company increased the prices of its vehicles with effect from April 1, 2023. The company's sales numbers volumes grew 6.5 percent year-on-year (YoY) to 160.5k units in the March 2023 quarter, as the demand remained robust, especially for the sports utility vehicles SUV). The company posted a jump of 42.3 percent in its net profit to Rs 2,670 crore for the quarter ended March 2023 as against Rs 1,875 crore in the year-ago period. The sales of domestic passenger vehicles in April 2023 went up 12.6 percent to 137,320 units from 121,995 units in April 2022.

Mahindra & Mahindra

M&M's share price rose 10% from April to May 2023. Shares of Mahindra & Mahindra Finance jumped 7.3% after the company announced its Q4FY2022-23 financial result. The firm's standalone net profit for the March quarter rose 14% year-on-year (YoY). Net interest income for the quarter stood at Rs 1,723 crore, which is higher by 13% YoY.

Auto ancillary stocks such as Sona Comstar, Bosch, Samvardhan Motherson, and Balkrishna Industries among others also contributed to the Auto index's rally

Nifty FMCG Index

The Nifty FMCG Index is designed to reflect the behavior of Indian Fast Moving Consumer Goods (FMCG) companies. FMCG includes companies that deal with goods and products, which are non-durable, mass consumption products, and available off the shelf. These include ITC, HUL, Nestle, Britannia, United Spirits, etc.

Nifty FMCG index has gained 7% year-to-date, since the start of the financial year FY2023-24, higher than the Nifty's 5% gain. Easing raw material prices and a healthy demand scenario have improved the profitability of FMCG firms which, in turn, has given boosted their stock prices.

FMCG stocks are considered to be non-cyclical stocks as the demand for FMCG products such as soaps, toothpaste, etc does not vary much due to economic cycles. On the contrary, FMCG stocks become more attractive during a slowdown as investors prefer to park their money in less risky FMCG stocks.


ITC  with its weightage of 37% significantly impacts the performance of the index. The company is powering the gains in the sector index, rising by 16.2 percent. Varun Beverages also gave a return of 16% during the period. In comparison, stocks such as HUL and Nestle India gained just 2% and 9%, it's a mixed picture for the sector as a whole.

ITC reported a 22.7% rise in consolidated net profit at Rs 5,225.02 crore for the March 2023 quarter. The company posted a net profit of Rs 4,259.68 crore during the same period in the last financial year. Revenue from operations surged 7% to Rs. 19,058 crore as against Rs. 17,754 crore in the year-ago quarter.

Hindustan Unilever Limited HUL

HUL share price rose 5% year-to-date. In the fourth quarter of 2022-23, HUL reported a Total Income of Rs 15,707 Crore and up 11 % from last year's same quarter. The company reported a net profit after tax of Rs 2,561 Crore, up 8.5% y-o-y. The fall in crude oil and palm oil prices has benefitted the company.


Nestle India's stock grew 15% YTD. The company's March quarter net profit jumped 24 percent on-year to Rs 736.6 crore. Nestle India's sales grew 13.8% y-o-y aided by growth across categories.  The company said, this is the highest growth in a quarter in the last decade, excluding the exceptional quarter in 2016 which was off a low base in 2015.

Britannia Industries' share price also rose 5.7% YTD. The consolidated revenue grew 11% y-o-y supported by the strong performance of its biscuits segment. Godrej Consumer's stock price grew 6.1%. The company reported a 10% y-o-y growth in revenues helped by volume growth in the India business.

Varun Beverages

Varun Beverages - one of the largest PepsiCo franchisees in the world, crossed the Rs 1 lakh crore market capitalization. Shares of the bottling company surged 16% since April 2023. Shares of the company more than doubled in the last year and in the last three years the stock has surged 475%.

The company reported a strong volume growth supported by higher demand for carbonated soft drinks. It also saw a strong expansion in operating margins due to operating leverage benefits.


Overall, the majority of banks have announced positive earnings for the quarter ending March 2023 (Q4FY23). Banks have performed well as their loan portfolios have grown, margins have increased, and asset quality has improved.

Nifty PSU Banks Index surged 16.8% during April 2023. All stocks gave

double-digit returns. JK Bank, Bank of Maharashtra, SBI, and PNB are among the top performers in the last month.


The healthy Q4 results and FII inflow uplifted the domestic market during April 2023. FIIs returned to the Indian markets and were net buyers in March and April 2023. They bought shares worth Rs 1,997 crore and Rs 5,771 crore in March and April, respectively.

Though the IT companies reported weak Q4 earnings it was offset by healthy numbers from the realty, FMCG, banking, and auto sectors. To Invest in the Nifty 50 open a demat account with Samco!

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