Top wealth creators of H12020: Stocks that defied gravity to rally up to 1,600%

The first half of Calendar 2020 remained highly volatile for stock investors on Dalal Street, as the benchmark equity indices slumped to hit new peaks in January-February, only to slump to new 52-week lows in March and then stage a major rebound from there,

Year to date, the indices are down 15 per cent, thanks mainly to the Covid-19 disruption.

A couple of stocks have defied the trend and stepped out of this pattern to deliver up to 1,646 per cent return in these six months. On a year-to-date basis, shares of smallcap firm Alok Industries have gained the most at 1,647 per cent to trade at Rs 55 on Wednesday. It was followed by Hathway Bhawani Cabletel & Datacom (up 1,348 per cent), Ruchi Infrastructure (up 559 per cent) and Opto Circuits (up 498 per cent).

Alok Industries, the Mumbai-based bankrupt integrated textile manufacturer, hogged limelight after Reliance Industries acquired it along with JM Financial Asset Reconstruction Company last year.

As on March 31, RIL owned 37.70 per cent stake in the company, while retail and high net worth investors held 45.67 per cent.

Overall, the start of the year was marked by a lot of uncertainty amid weak macroeconomic data. The spread of the coronavirus pandemic, which led to a nationwide lockdown since March end, only festered the wound. Firm global cues along with monetary and fiscal measures kept the downside capped during this period.

However, analysts are cautious on the market for the rest of the year due to shaky fiscal situation and rising joblessness. Deepak Jasani, Head of Retail Research at HDFC Securities, said there is fear that stress in the financial sector may sooner or later spread to the real sector of the economy.

Among the stocks that bucked the broader market downtrend in 2020 so far, 66 more than doubled investors’ money in these six months. They included Opto Circuits, Andhra Cements, Sintex Plastics, Oswal Agro, Bilcare, Ballarpur Industries, Punj Lloyd, Suzlon Energy, Adani Green, GMM Pfaudler, Bombay Rayon, Uttam Value Steel and Apollo Finvest, among others.

BSE Midcap Index is down 13 per cent for the year, and BSE Smallcap Index 9 per cent.

Siddharth Sedani, Vice President for Equity Advisory at Anand Rathi Shares and Stock Brokers, says consumption, agri-based, chemicals, IT and pharma stocks may lead the next rally when the economy starts reviving.

“All these sectors went through a long bad patch over the past few years and they can be good bets for revival both in terms of business prospects and price action,” he said.

On BSE, 152 stocks gained between 50 per cent and 100 per cent between January and June. HLE Glascoat gained 98 per cent to trade at Rs 923 as of June 30 from Rs 467 on December 31. Other top gainers included Gammon Infra (up 97 per cent), Kilpest India (up 97 per cent), Alkyl Amines Chemicals (up 95 per cent), Nagarjuna Fertilizers and Chemicals (up 85 per cent), Ebixcash World Money India (82 per cent) and Vodafone Idea (up 80 per cent), among others.

Just five heavyweights capped the downside for Sensex. With over 24 per cent gain, Bharti Airtel emerged the top gainer followed by Reliance Industries (up 15 per cent), Hindustan Unilever (up 13 per cent), Nestle India (up 13 per cent) and Sun Pharmaceuticals (up 11 per cent). Other components of the 30-share pack are down up to 68 per cent YTD.

BSE Sensex scaled its all-time high of 42,273 on January 20 and a 52-week low of 25,638 on March 24.

On the other hand, Gayatri Projects (down 79 per cent), Suven Life Sciences (down 86 per cent), Darjeeling Ropeway (down 89 per cent), Mauria Udyog (down 93 per cent) and 7NR Retail (down 93 per cent) were among the top wealth destroyers of the first half year.

“The July-December period is expected to be slightly better for most sectors, though financials and banks stare at a new cycle of non-performing assets (NPAs) once the moratorium ends in August,” said Umesh Mehta, Head of Research, Samco Securities.

“Other sectors should soon witness a pickup in demand. There can be supply-side hindrances with escalating tension on China border, worker shortage in cities and Covid-related movement barriers in certain states. Nifty is expected to correct from the current level. Lame demand is expected to create a lot of negative surprises due to change in consumer behaviour, which may adversely affect small businesses,” he said.

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