The market is touching new heights, yet investors are still on the lookout for stocks showing better performance. In this regard, the Nifty Next 50 index has gained attention. It tracks companies that could soon be included in the Nifty 50 and have seen rapid growth in their profits.
Let’s explore why Nifty Next 50 is attracting investors and how it could be beneficial for you too.
What’s Happening?
According to The Times of India, the Nifty Next 50 index is poised to achieve a revenue growth of 39% in the coming year. This estimation is based on Bloomberg’s projections. Despite a remarkable 65% growth last year, amidst the challenges of the broad market, it is anticipated that the outstanding performance of Nifty Next 50 will persist. Recently, the index recorded its most successful quarter since 2009, outperforming the larger NSE Nifty 50 index.
With the inclusion of potential companies in the Nifty 50, the revenue estimates for this index have seen a growth of 20% so far this year, significantly surpassing the 3.5% growth of the Nifty index.
But what reasons are driving the outperformance of Nifty Next 50? Let’s try to understand.
Reasons Behind Nifty Next 50’s Growth
There are several reasons contributing to the rapid growth of Nifty Next 50, some of the main ones are listed below:
High Revenue Growth: Companies in Nifty Next 50 are experiencing rapid revenue growth. Projections suggest a 39% growth in the revenue of these companies in the next year.
Investor Interest: With the Indian stock market already trading at high levels, investors are now looking to invest in companies not included in the Nifty 50. Nifty Next 50 has emerged as a good option for such investors.
Development of the Indian Economy: A significant reason behind the success of Nifty Next 50 is the inclusion of leading companies from the industrial and materials sectors. With an estimated growth of over 7% in the Indian economy in 2024, these companies are expected to benefit directly.
Performance of Nifty Next 50
Nifty Next 50 has become the best-performing index compared to others. This can be gauged from the fact that it has seen a growth of approximately 65% in the past year, and as of 2024, it has surged by around 18%, while the Nifty has witnessed only about 4% growth.
This graph shows the performance of Nifty and Nifty Next 50 from April 2023 until now.
What’s in it for Investors?
Companies included in Nifty Next 50 generally belong to sectors expected to grow rapidly in India. This means that investors are investing their money in companies likely to perform well in the future.
What’s Next?
With the growth of the Indian economy, there is hope for a strong performance from Nifty Next 50 in the future. Considering factors such as high revenue growth, investor interest, and the development of the Indian economy, it can be assumed that Nifty Next 50 may continue to perform well in the future.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The article is for information purposes only. This is not an investment advice.
*Disclaimer: Teji Mandi Disclaimer
