In a volatile year for Indian stocks, the Tatas and the Mahindras outperformed the Birlas.
At least according to the group indices compiled by the National Stock Exchange that measure the performance of 39 companies with a combined market capitalisation of Rs 17.9 lakh crore from the three of India's largest conglomerates.
The Nifty Tata Group Index, comprising 24 listed companies from India's largest business house, returned 13 percent gains this year, beating the 5 percent rise in the benchmark Nifty 50. In comparison, the Nifty Mahindra Index rose 5 percent while the Nifty Aditya Birla Group Index declined 18 percent.
For the Tata and M&M groups, the gains were driven by their software services businesses that have a 69 and 30 percent weight, respectively, in their respective indices. That's because an export-driven information technology industry benefited from a weaker rupee which has fallen about 11 percent this year. Aditya Birla Group's 60 percent exposure towards cement and related products took a toll as the industry battles a supply glut and excess capacity even as costs rise.
The technology-driven surge for the Tata and Mahindra groups mirrors the Nifty I.T. Index's stellar run. Helped by the rupee depreciation, it has gained 40 percent—the most among sectoral indices. Apart from that, FMCG, energy and pharma were the other sectors that gained this year, rising 4-10 percent.
Overall, it's been a volatile year, with the VIX Index, also called the fear gauge, surging more than a third as rising fuel prices and a weaker rupee triggered fears of higher inflation, rate hikes and a wider current account deficit. Nifty Realty Index declined the most, losing more than 30 percent during the period. Other losers include Nifty PSU Bank and Nifty Media, down more than a quarter since the beginning of 2018.
Among the group indices, 24 Tata firms represent eight sectors, eight Mahindra stocks have been picked from five sectors and seven Aditya Birla Group scrips are from four sectors.
The Biggest Contributors
Tata Consultancy Services Ltd., India's largest software services provider, has the biggest weight on the group index. For Mahindra, it's India's largest maker to utility vehicles M&M; and for the Aditya Birla Group, it's UltraTech Cement Ltd.
Here's are the group companies that performed the best for each of the three:
Tata Group
All the three best-performing companies from the group are technology-driven. NELCO Ltd., a satellite-based network communications services provider, more than doubled shareholder value in 2018. TCS and Tata Elxsi Ltd. followed in offering returns to investors.
Mahindra Group
Two Nifty 50 companies, Tech Mahindra Ltd. and M&M, feature among the top three performers of the year. The groups logistics arm is the third on the list.
Aditya Birla Group
All group companies, barring Aditya Birla Fashion and Retail Ltd., eroded shareholder wealth this year led by Vodafone Idea Ltd.—the combined entity formed after the merger between Idea Cellular and Vodafone India. Aditya Birla Money Ltd. and Aditya Birla Capital Ltd. were the other two worst performers for it.
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