Why HDFC Life, Bata, 3 others have lagged Sensex for 5 years

Beating the benchmark might not be easy. But underperforming it for five straight years? That’s a let-down. From all listed stocks with a market cap exceeding Rs 500 crore, we found five stocks, including a large cap, that have lagged the BSE Sensex in each of the last five calendar years. Let’s unpack what has held these laggards back. The five also-rans (returns in %) Years HDFC Life Insurance Bandhan Bank Bata India SIS Entertainment Network (India) BSE Sensex 2024 -4.8 -34.9 -16 -22.5 -3 8.1 2023 13.6 0.5 -0.2 15.3 18.6 18.7 2022 -13.1 -7.4 -11.4 -14.9 -12.2 4.4 2021 -4.4 -36.9 19.1 7.4 -3.3 21.9 2020 8.9 -20 -9.6 -11.3 -37.4 15.8 Returns were calculated for each calendar year HDFC Life Insurance For a business that consistently ranks among the top life insurers in India, HDFC Life’s stock performance tells a different story. Over the past five years, it has underperformed the Sensex every single year despite its strong brand recall and a diversified distribution network. The culprit is the company’s term insurance business, a key profitability driver for life insurers, that hasn’t scaled meaningfully. This is why despite solid topline growth (annual premium equivalent or first premiums from new policies growing two times from FY21 to FY25), profitability hasn’t kept pace. At the same time, low-margin savings and annuity products have grown faster, diluting margins. For instance, new business margins, once north of 27 per cent, have remained range-bound in recent years. In addition, the merger with Exide Life, while adding distribution heft, also brought integration costs and operational drag. While synergy benefits are gradually flowing in, the journey hasn’t been margin-accretive yet. Unless the company re-energises its high-margin product engine and delivers operating leverage, the stock could remain a laggard. Bandhan Bank Bandhan Bank’s roots in microfinance, while once a strength,