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It took 367 sessions for the benchmark NSE Nifty index to rally more than 10,000 points from the lows of March 2020. The domestic equity market witnessed severe selling pressure in early last year due to the spread of Covid-pandemic which led to the nationwide lockdown. As a result, the index hit an intraday low of 7,511 on March 24, 2020. However, liquidity measures taken by the government and central bank coupled with sustained inflows by foreign institutional investors and the entry of new investors in the market brought the momentum back. The 50-share index scaled its fresh record high of 17,576 on September 16, 2021.
The ongoing rally has managed to create humungous wealth for the investors which have entered the market during the past 18 months. Data available with William O’Neil India showed that the number of Demat accounts opened between December 2019 and August 2021 has gone up by more than 70% to 6.9 crore. This has also brought liquidity pouring into the domestic equity markets.
Top gainers
With a rally of 2094%, Balaji Amines emerged as the top gainer in the list. Shares of the company have jumped to Rs 4,953.80 on September 15 from Rs 225.80 on March 24 last year. This means Rs 1 lakh invested in this stock on March 24 last year has now turned into nearly Rs 22 lakh at present. Shares of Tanla Platforms have also rallied 2088% to Rs 849.30 from Rs 38.80 during the same period.
Other players including Adani Total Gas, Intellect Design Arena, Adani Enterprises and Hikal have also gained more than 1,000% since March 24, 2020. Companies whose market capitalisation were more than Rs 500 crore in March last year were considered for the article. Overall, as many as 44 companies have soared more than 500% amid the ongoing recovery.
Adani Transmission (up 948%), HLE Glascoat (up 904%), Laurus Labs (up 900%), Tata Elxsi (up 826%), Jindal Stainless (Hisar) (up 823%), HFCL (up 822%), KPIT Technologies (up 788%), Alkyl Amines (up 766%), Zensar Technologies (up 759%), APL Apollo Tubes (up 728%) and Shree Renuka Sugars (up 712%) stood among other majors gainers in the list.
On the other hand, Future Lifestyle Fashions, YES Bank, Omaxe, Future Retail, Grandeur Products, Future Supply Chain and Atlas Jewellery India have declined between 40% and 66%.
Market outlook
According to Motilal Oswal Financial Services, good Q1FY22 earnings delivery has boosted hopes for a solid FY22 with over 30% projected Nifty earnings growth, on the back of a strong 15% earnings growth in FY21. Q1FY22 Management commentaries across the board suggest an improved demand environment post-June ’21, led by the easing of restrictions, lower active Covid-19 cases, and a pickup in vaccinations.
Of late, real GDP grew at a record 20.1% YoY in 1QFY22, albeit on a low base. Growth was largely attributable to 13.8% YoY growth in consumption and 56.7% YoY growth in gross capital formation (GCF). The GST collection also remained above Rs 1 lakh mark for the second consecutive month at Rs 1.12 lakh crore for August 21.
“Amid the buoyant sentiment and elevated activity in the primary markets, Nifty valuations at around 22x 12m forward EPS remain rich. Thus, consistent delivery on earnings expectations becomes crucial going ahead. From the next 12 months perspective, we are positive on IT, BFSI, metals, cement, capital goods and select names within healthcare and consumer,” Motilal Oswal Financial Services said.
Investment Ideas
For stock-specific investors, Motilal Oswal Financial Services suggest a couple of stocks from the large cap and midcap space. The brokerage house prefers ICICI Bank, State Bank of India, Infosys, HCL Technologies, UltraTech Cement, Hindustan Unilever, Titan, Divi’s Labs, Hindalco and SBI Cards in the large cap space. On the other hand, it prefers Max Financial, Chola Finance, JK Cements, Indian Hotels, Deepak Nitrite, Orient Electric, Solara, Zensar Technologies, L&T Technology and Aditya Birla Fashion in the midcap space.
On the other hand, Angel Broking prefers stocks like Ashok Leyland, Carborundum Universal, Federal Bank, GNA Axles, Shriram City Union, Suprajit Engineering, L&T Infotech, Stove Kraft, AU Small Finance, Dalmia Bharat, Safari Industries, HDFC Bank, Sona BLW, Bajaj Electricals, Amber Enterprises and PI Industries.