Around 25% of the Nifty 50 constituents have delivered negative to low single-digit compounded annual growth rate (CAGR) returns over the past five years, significantly underperforming the benchmark index. A review of the index’s performance shows that 13 of its 50 stocks generated annualised returns ranging from double-digit declines to modest gains, compared with the Nifty 50’s five-year CAGR of about 9%.

The calculation excludes gains from dividends, bonus issues and share buybacks. Based on these returns, investments in several large-cap stocks delivered lower returns than the broader market over the period.

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IT Companies Feature Among Major Laggards

Information technology companies accounted for a large share of the underperforming stocks.

Tata Consultancy Services recorded the weakest five-year CAGR among the group at negative 10%. Wipro and Infosys each posted a negative CAGR of 8.8%, while HCL Technologies delivered a CAGR of about 1%. Tech Mahindra generated an annualised return of 4% over the same period.

This industry has been dealing with reduced discretionary spending on technology abroad, while companies have been working on cost efficiency and AI-based automation. These developments have impacted the earnings visibility for various IT firms.

Underperformance Of Banks And Consumer Stocks

Both private banking firms – HDFC Bank and Kotak Mahindra Bank – were also underperformers, posting five-year CAGR gains of 1% and 3%, respectively.

As for the consumer-oriented stocks, Reliance Industries has seen a CAGR gain of 4.5%, whereas Hindustan Unilever has had a negative CAGR gain of 2.5%. Asian Paints also remained in negative territory with a five-year CAGR decline of 2.1%.
Other companies in the list included HDFC Life Insurance, which recorded a negative CAGR of 3.6%, Tata Motors, whose passenger vehicle business generated a marginal CAGR of 0.2%, and Dr. Reddy’s Laboratories with a CAGR of 3.8%.

Mutual Funds Continue To Hold Significant Exposure

Even with such poor long-term performances, these companies have retained significant stakes in the mutual funds.
Mutual funds held stakes worth approximately ₹52.38 lakh crore in 1,257 companies as of May 2026. Among these 1,257 companies, the 13 poor-performing Nifty 50 stocks were worth close to ₹9.16 lakh crore, which is about 18 percent of the total stake.

The stake of mutual funds in Reliance Industries was worth around ₹1.79 lakh crore, while Infosys had approximately ₹1.04 lakh crore and Kotak Mahindra Bank had ₹92,468 crore. Tata Consultancy Services, HCL Technologies, Tech Mahindra and Asian Paints also featured among the major holdings.

With geopolitical concerns easing in recent weeks, market attention is gradually shifting towards the upcoming quarterly earnings season and domestic economic indicators. Even as the benchmark indices have recovered since April, several heavyweight Nifty 50 companies continue to trail the broader market over the five-year period.