The Indian stock market has seen a turbulent December, and three prominent Nifty 50 stocks—Nestle India Ltd, Asian Paints Ltd, and IndusInd Bank Ltd—have hit their 52-week lows on December 19. Collectively, these stocks have erased a staggering ₹2.2 lakh crore of investors’ wealth, with declines of up to 44% from their respective 52-week highs. Let’s delve into the reasons behind their sharp downturns.
1. IndusInd Bank: A Rough Patch in the Banking Sector
- 52-Week High: ₹1,694.5
- 52-Week Low: ₹948
- Fall: 44%
- Erosion in Market Cap: ₹56,395 crore
IndusInd Bank has been under pressure since reporting disappointing Q2FY25 earnings. The lender’s consolidated net profit dropped 39.5% YoY to ₹1,331 crore, while net interest income (NII) grew by only 5% YoY to ₹5,347 crore, falling short of market expectations.
Adding to the woes, provisions and contingencies surged by 87% YoY to ₹1,820 crore due to stress in its microfinance loan book. Global brokerage UBS recently downgraded the bank’s target price from ₹1,350 to ₹1,150, citing rising non-performing loans (NPLs) and deteriorating portfolio quality as significant concerns.
2. Asian Paints: Facing New Challenges
- 52-Week High: ₹3,422.95
- 52-Week Low: ₹2,265.35
- Fall: 33.8%
- Erosion in Market Cap: ₹1.07 lakh crore
The market leader in paints saw its stock tumble after two key senior executives, Shyam Swamy and Vishu Goel, announced their resignations on December 17, 2024. The leadership shake-up has raised concerns among investors.
Additionally, Asian Paints is grappling with stiff competition from newer entrants like Birla Opus. Urban markets, where the company has a stronger presence, are facing economic pressures such as high food inflation, rising housing rentals, low wage growth, and high interest payments. These factors, coupled with a higher base effect from last year, have slowed its growth trajectory.
3. Nestle India: Challenges in the FMCG Sector
- 52-Week High: ₹2,778
- 52-Week Low: ₹2,147.4
- Fall: 22.7%
- Erosion in Market Cap: ₹58,384 crore
Nestle India has been struggling on the stock market since reporting a marginal decline in September quarter profits. The company is facing a challenging external environment marked by muted consumer demand and soaring commodity prices, particularly for coffee and cocoa.
Despite its strong brand value, pricing power, and robust parentage, the stock has faced corrections due to its elevated valuations. According to Emkay Global, Nestle’s inability to meet high valuation expectations has resulted in a steady decline in its share price.
