Broader lessons from the stock markets: How they made you rich
Companies that aim to become big should learn the art of management from some of the consistent performers in the stock market
Investors should be thankful to companies that have boosted their confidence in the stock market with their robust performance since the turn of the century. Some of the companies have changed the fortune of investors on an investment of just Rs 10,000. The key is betting on a quality company with patience and ignore the daily noise.
Companies like Balkrishna Industries, Bajaj Finance, JSW Steel, UPL, Relaxo Footwears, Havells India, Symphony Nesco and Eicher Motors have delivered over 50,000% return to investors during the past 21 years. Even some other big names including Reliance Industries (RIL), Nestle, ICICI Bank and HDFC Bank also gained between 3,000%-9,000%. Overall, 50 companies in the BSE 500 index have surged more than 10,000% in this century.
The performance of all these majors are backed by robust growth in their top as well as bottomline. For instance, the net profit of Balkrishna Industries jumped to Rs 1,177.53 crore in FY21 from Rs 194.53 crore in FY11, indicating an annualised growth of over 20%. On the other hand, net sales of the company increased to Rs 5,783 crore from Rs 2,081 crore during the past 10 years. Likewise, the net profit of Eicher Motors and Reliance Industries grew by over 15% and 10% annually in the past 10 years.
The robust show of India Inc is also visible in the growth of the benchmark BSE Sensex that has rallied nearly 10 times to 52,925 since the beginning of 2000. There are hopes that the index will cross 1,50,000-mark by 2030 with the financialisation of the economy, rising confidence of investors and consumer spending. Therefore, you should stay put with the equities.
Of late, a couple of midcaps and smallcap firms got listed on Dalal Street amid the ongoing bull market run in the domestic equity market since March 2020. Companies that are aiming to become the bluest of bluechips can take note from the winners who have dreamt big, showed determination, scaled up, adapted to changes and displayed clear vision to achieve success for them as well as shareholders.