Stock picking is not always easy despite picking them up from the basket of some of the biggest and fundamentally strong businesses. While the benchmark Nifty 50 index has delivered a CAGR of 11.1% in the last 5 years, some stocks remained laggards and are disgruntling investors with their negative returns. In that vein, here are 3 worst-performing Nifty 50 stocks in the last 5 years (excluding dividends).
IndusInd Bank Limited
IndusInd Bank Ltd. (NS:INBK) is a private-sector lender with a market capitalization of INR 92,133 crores, making it the 5th largest private bank in the country. However, despite its revenue growing at a 5-year CAGR of 15.5%, the share price of IndusInd Bank has delivered a negative return at a 5-year CAGR of 8.59%, making it the worst-performing Nifty 50 stock in this period.
FIIs are also losing their confidence in this bank, as they have noticeably trimmed down their stake from 47.65% in December 2021 to 38.71% by March 2023. In fact, while Nifty Bank is currently around 1% away from its all-time high (ATH), IndusInd Bank’s shares are still 41% away from their ATH.
Hero MotoCorp Limited
Hero MotoCorp Ltd (NS:HROM) is a two-wheeler manufacturer, with a market capitalization of INR 51,668 crores, making it the 100th largest company on the NSE. The stock holds a weightage of a mere 0.43% in Nifty 50 (the lowest) therefore its underperformance hasn’t been able to impact the frontline index much as it has been falling at a 5-year CAGR of 6.35%. In fact, Hero MotoCorp’s shares are currently trading at the same level as they were at in May 2014.
The lackluster performance is also there on the earnings side. Although the company clocked a record revenue of INR 34,730.5 crores in FY23, it hasn’t been able to bump up its profits which are falling at a yearly rate of 8.36% (5-year CAGR). Profit margins which remained at 12.17% in FY17 fell to 8.09% in FY23.
Coal India Limited
Coal India Ltd (NS:COAL) is another counter that has disappointed investors for a long time. It has almost a monopoly in the coal-mining sector and has a market capitalization of INR 1,45,532 crores and holds a meager weightage of 0.62% in Nifty 50. While the stock has rallied sharply from its multi-year low in October 2020 and almost doubled when it reached its peak in November last year, still its last 5-year CAGR stands at a negative 2.81%, making it the third worst-performing Nifty 50 stock.
However, there’s something different about Coal India than others on the list. It is a high dividend-paying stock and has remained so for a long time. Investors love Coal India for its dividend which is one of the reasons its price gravitates towards the south as the company keeps on shelling out hefty dividends. The stock is currently trading at a mouth-watering dividend yield of 9.89% which is rare to beat for any large-cap and is the highest in the Nifty 50 index.