The BSE TECk index, which tracks the performance of technology companies listed on the Bombay Stock Exchange, has delivered a return of 25.3% during the first eight months of 2024, outperforming major benchmarks like the Nifty 50 and Nifty 500, according to a study by Motilal Oswal Asset Management Company.
Key Findings:
- Long-Term Outperformance: Over the past five years, the BSE TECk has consistently delivered returns, showcasing its strength and potential.
- Recent Surge: Since March 2024, the BSE TECk has outpaced the Nifty 50 and Nifty 500 in terms of returns.
- In the last one year, the BSE TECk has given returns of 42.12% from 30th August 2023 to 30th August 2024. During the same period, the Nifty 50, Nifty 500, and Nifty IT provided returns of 31.07%, 40.24%, and 37.29%, respectively.
- The index only underperformed in CY 2022, when the global-economical recovery post COVID, drop in GDP numbers of US in first quarter, Tech sector shares underperformance, impacted the index.
- In 2023, the index has given 18.8% return. While in 2020 it offered 43.8% return and 49.7% return in 2021.
The study also revealed that from March 2024 to August 2024, the BSE TECk delivered a return of 23.91%, followed by the Nifty IT at 22.61%. The Nifty 50 and Nifty 500 had returns of 13.03% and 17.18%, respectively.
In the three months from June to August 2024, the BSE TECk recorded returns of 27.37%. In comparison, the Nifty 50, Nifty 500, and Nifty IT provided returns of 12.01%, 12.47%, and 32.12%, respectively.
In the last 1 month (August 1, 2024, to August 30, 2024), the BSE TECk showed growth of 4.58%. The Nifty IT achieved growth of 4.74% during the same period. The Nifty 50 and Nifty 500 recorded returns of 1.14% and 0.87%, respectively, in August 2024.
Comparison with Other Indices:
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Factors Driving Performance:
- The global economic recovery from the COVID-19 pandemic has boosted the technology sector.
- Continued advancements in technology and innovation have fueled growth in the sector.
- Many technology companies have exhibited solid financial performance and growth prospects.
- The impressive performance of the BSE TECk index highlights the potential for investors to benefit from the growth of the technology sector in India.
Value of Investment of Rs 1 Lakh as on August 30, 2024
As seen in the table above, the Motilal Oswal study shows that an investment of Rs 1,00,000 in the BSE TECk would have grown to Rs 1,42,123 in the last year. Meanwhile, an investment of Rs. 1,00,000 would have grown to Rs. 3,56,009 over a period of 7 years. For the same period, an investment of Rs. 1,00,000 in the Nifty 50, Nifty 500, and Nifty IT would have grown to Rs 2,57,809, Rs 2,75,983, and Rs. 4,08,462, respectively.
Raamdeo Agrawal, Chairman of MOFSL is positive about the opportunities in Technology sector. He believes that the digital ecosystem in India is right for Atoms-to-Bits and that India is ready to unlock its digital potential. Globally, value is migrating from Atoms (businesses dealing in physical matter) to Bits (businesses which are digital in nature). This has already played out in a big way in the US.