# chip earnings — X 热门讨论 (2026-09-27 16:55 UTC)
## @WealthEnrich (Advait Arora) · 09-27 09:32 · ♥31 ↻1 💬2 For almost 4 years from 2018 onwards, Auto was one sector which really tested investor patience. Nifty Auto fell over 22% in 2018 alone and after this, for years, hardly anyone wanted to touch Auto stocks. Weak rural demand, rising insurance costs, the shift to BS6 emission norms and later the global chip shortage during COVID... every few months there was some new problem (usually unheard of). During this same time period, money kept moving towards FMCG. HUL, Britannia, Nestle, ITC... familiar businesses, regular consumption, good cashflows, dividends and much less headache. When markets are uncertain (like most times) investors are usually happy to pay more for this type of comfort.
Then things started changing at quick pace in Auto sector from 2022 start. Supply chains improved, chip shortages eased, demand came back, volumes improved and margins also got better. Slowly, company numbers started improving. Nifty Auto gained around 15% in 2022, almost 48% in 2023 and another 22% plus in 2024. Basically, ₹1 lakh invested in the Auto index at the beginning of 2022 became roughly ₹2.1/2.2 lakh by the end of 2024.
Even after the Auto stocks runup, Nifty Auto was trading at around 25-26 times earnings while Nifty FMCG was still above 42 times. By end 2024, Auto had gone up another 20% plus, but its PE had actually come down to around 22-23 while FMCG was still around 45+. So Auto share prices were going up, but profits were growing even faster. FMCG meanwhile had its own problems. Volume growth was weak, rural demand was slow and inflation was hurting margins. Paying 40 or 50 times earnings looks fine when growth is good, but once growth slows down, the same valuation starts looking expensive very fast. Nothing was really wrong with FMCG businesses & Auto also did not suddenly become perfectly good. This time, Auto had the growth & that's what was the big trigger. You can own a very good business & still get almost no return for 3 or 4 years. At the same time, some ignored or sidelined sector may start reporting better sales, better margins and better profits. Initially, not many investors pay attention to the change in trend. Then 2 or 3 good quarters come, prices start moving & more investors get attracted & start looking at the sector. By the time everyone starts talking about it, a large part of the move may already be done. Question is... when do you normally start noticing the change? https://x.com/WealthEnrich/status/2104142204646391969