NIFTY 50 ROE Recovery Drivers

Hi, friends. Welcome to the 21st episode of Gyani Sharmaji.

Today, we will discuss about the earnings compounders of NIFTY 50 over the last

decade. A rising index level return on equity generally signals improving corporate

profitability, often supporting higher valuations. So, let us analyze the

NIFTY's aggregate return on equity trends. After decent profitability in the mid-2010s,

aggregate return on equity trended lower, hitting lower levels around 2021 to '22.

By 2022, the NIFTY 50's return on equity had dipped to around 12.06%, reflecting subdued

earnings traction post global slowdown, pandemic impacts, weak corporate investment, and cyclic downturns