Wealth Destroyers: Stocks That Plunged Over 50% in 2024 – Analysts Weigh In on 2025

While 70% of stocks in the BSE Sensex, BSE Midcap, and BSE Smallcap indices delivered positive returns in 2024, a significant number—around 325—struggled to stay afloat. Among the worst performers, Fusion Micro Finance saw the steepest decline, plummeting nearly 68% on the BSE Smallcap index. Its stock price fell from ₹576 on December 29, 2023, to ₹186.75 as of December 13, 2024.

Other significant losers in the smallcap space included Spandana Sphoorty Financial and Filatex Fashions, both declining by 67%. Additionally, stocks like HMA Agro Industries, GVK Power & Infrastructure, Kamdhenu Ventures, and India Pesticides saw year-to-date losses of 51%, 50%, 48%, and 47%, respectively. Despite these setbacks, the BSE Smallcap index gained an impressive 33.5% YTD.

What Should Investors Do?
Global financial firm HSBC suggests favoring Indian large-cap stocks over mid- and small-caps, citing their more attractive valuations and stronger earnings profiles.

In the BSE Midcap index, which gained 30% YTD, Zee Entertainment Enterprises experienced a sharp decline of nearly 52%. Other midcap stocks such as Aarti Industries, Bandhan Bank, Relaxo Footwears, IDBI First Bank, and AU Small Finance Bank fell by over 25% as of December 13, 2024.

The broader market has faced heightened volatility since October 2024. After reaching record highs in September, both the NSE Nifty and BSE Sensex corrected sharply in October and November. Contributing factors included global economic weaknesses, geopolitical tensions, high valuations, and elections in the US and India.

Foreign Portfolio Investors (FPIs), who had purchased equities worth ₹93,000 crore by September, turned net sellers in October and November, offloading shares worth ₹1.10 lakh crore.

In the 30-share Sensex pack, eight companies recorded YTD losses. IndusInd Bank plunged 38% since December 2023, while Asian Paints, Nestle India, and Hindustan Unilever declined by 29%, 15%, and 10%, respectively. Kotak Mahindra Bank and Titan Company fell by 5% each. However, the Sensex overall gained nearly 14% in 2024.

Outlook for 2025
According to JM Morgan Asset Management, India is expected to sustain robust earnings momentum in 2025, supported by falling interest rates and strong services export growth. While high equity valuations—driven by domestic investments—may cause short-term corrections, the long-term investment potential remains solid.

India’s prominence as a hub for “friendshoring” in emerging Asia is likely to attract foreign direct investments, boosting the manufacturing sector and driving economic growth. HSBC adds, “We see promising opportunities in India’s domestic-driven sectors, benefiting from demographic advantages, a rising middle class, and technological advancements.”