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Equity investors have snagged quick returns amid the ongoing rally on Dalal Street. Data showed that 19 companies in the BSE500 index have rallied over 100% since the beginning of the ongoing financial year. On the other hand, the benchmark BSE Sensex has gained 20% while BSE500, BSE Midcap and Smallcap indices have rallied 22%, 25% and 35%, respectively, during the same period. Market watchers believe that robust liquidity, positive global cues, the rapid pace of vaccination, better-than-expected Q1 earnings and fall in Covid cases supported sentiment.
Top Gainers
With a rally of 338%, JSW Energy emerged as the top gainer in the BSE 500 index. Shares of the company have jumped to Rs 385.15 on September 29 from Rs 87.95 on March 31. It was followed by Gujarat Fluorochemicals (up 222%), HFCL (up 187%), Balaji Amines (up 161%), Happiest Minds Technologies (up 156%), Jindal Stainless (up 137%), Dish TV India (up 124%) and Caplin Point Laboratories (up 119%). Allcargo Logistics, Indian Railway Catering and Tourism Corporation, Sun Pharma Advanced Research, Tata Elxsi, Oil India, SRF, Welspun India, Mindtree, Lux Industries and KPR Mills have also gained between 100%-120% in the past six months. Overall, nearly 87% of the stocks in the BSE 500 have delivered a positive return to investors since April 1, 2021.
ICICI Securities (up 99%), Century Textiles (up 98%), eClerx Services (up 98%), DCM Shriram (up 97%), KPIT Technologies (up 97%), Gujarat Alkalies (up 95%), GHCL (up 94%), Indian Energy Exchange (up 91%), Trident (up 90%), Venky’s (India) (up 86%) and Persistent Systems (up 84%) stood out among gainers in the BSE 500 index.
What’s next?
Global brokerage firm Jefferies believes India is viewed to be a beneficiary of the China turmoil, India’s Nifty has already outperformed emerging market benchmarks by 19-33 percentage points on a 3, 6 and 12 months basis.
“From such levels, Nifty performance has been weak historically. Also, over the last 6 months, India has received only $1.5bn of net inflow from foreigners despite the China problems. We see rising equity supply and peak valuations as risks. We further reduce portfolio beta by cutting weight in Tata Steel, SBI and adding ITC,” Jefferies said.
Kranthi Bathini, equity strategist, WealthMills Securities said that even though the structure of the market broadly remains bullish, one needs to be very stock specific in the current markets and choose stocks with good quality fundamentals and management and see its fair value before investing.
Stocks in focus
Brokerages are bullish on a couple of stocks despite the run-up. For instance, Bathi suggested investors zero in on players like Indian Oil Corporation, ABB Power and Firberweb. On the other hand, Jefferies is positive on Max Healthcare Institute and Dixon Technologies with a target price of Rs 421 and Rs 5,230, respectively.