BSE benchmark Sensex gained just 2.60 per cent since August 15, 2019, while the broader BSE500 declined 8 per cent, BSE Midcap Index 17 per cent and BSE Smallcap Index 25 per cent. Sino-US trade tensions, Covid-19-led disruption, domestic macro-economic woes, and volatile crude oil prices kept investors on the edge.
However, 25 stocks in the BSE500 pack more than doubled investors’ wealth in this one year, with Adani Green Energy gaining the most at 677 per cent.
It was followed by GMM Pfaudler (up 342 per cent), Alkyl Amines Chemical (up 269 per cent), Dixon Technologies (up 245 per cent) and Granules India (up 242 per cent).
While domestic equities have seen a major rally, rising some 35 per cent from their March lows, the benchmark indices are still down about 10 per cent on a year-to-date basis and analysts believe that market may consolidate in the near term. They, however, feel the momentum will remain in favour of the bulls in the long run.
“We are positive on domestic equities. But investors should stick with quality stocks considering the ongoing uncertainty,” said Sanjeev Hota, Head of Research at Sharekhan.
He believes sectors like specialty chemicals, API in pharma space, private banks, insurance, information technology (IT) and auto and metals will do well on recovery hopes.
RIL shares advanced 66 per cent in last one year since last Independence Day, while JSW Steel is up 33 per cent, Divi’s Labs 104 per cent, Dabur 15 per cent and Tech Mahindra 6 per cent. UltraTech Cement and ICICI Bank have declined up to 12 per cent.
In the midcap and smallcap segment, Laurus Laboratories, Navin Fluorine, Indiamart Intermesh, Dhanuka Agritech, Affle (India), Essel Propack, Birlasoft, Escorts, ICICI Securities, Shipping Corporation, Deepak Nitrite, Vaibhav Global, Coromandel International, Ipca Labs, JSPL and Amber Enterprises have been among the big winners, rallying over 100 per cent in last one year.
“There are chances that midcaps and smallcaps would outperform in the near to medium term due to attractive valuations compared with the largecaps. Besides, there is also a low risk of bankruptcies given the supporting fiscal measures by the government and RBI,” said Vinod Nair, Head of Research at Geojit Financial Services.