10 stocks defy slowdown, double money in 5 years & rally up to 260%

Pessimism is at its extreme all around with both high-frequency numbers and official macro data clearly signalling that the economic slowdown is getting more pronounced by the day.

The feeling of depression has become widespread too, with one study showing that Google search for the word ‘slowdown’ hit its highest level in August.

For stock investors, return hunt has to now focus on companies that managed to navigate well through the selloff ever since the IL&FS default, which triggered a major credit and liquidity crisis, causing some companies to go belly up.


Data available with Ace Equity showed 10 companies from different sectors such as oil & gas, sugar, textiles, aviation, NBFC, engineering, chemicals, real estate and pharma defied gravity and continued to rally through this turmoil.

These stocks advanced at least 45 per cent in last one year and doubled investors’ money in last five. Penny stocks were filtered out of this selection.

With a 261 per cent surge, refrigerator gas manufacturer Refex Industries emerged top gainer on the list. The company recently reported manifold rise in June quarter standalone net profit at Rs 8.70 crore against Rs 0.69 crore in the corresponding quarter last year.

Among others, Dhampur Sugar has risen 66 per cent, Cantabil Retail 59 per cent, SpiceJet 54 per cent, Muthoot Finance 52 per cent and Ion Exchange 50 per cent, among others.

Brokerage firm Stewart & Mackertich has a ‘strong buy’ recommendation of Dhampur Sugar with a price target of Rs 275. The scrip traded at Rs 148 on Friday.

“The company posted healthy numbers for Q1FY20 with strong earnings visibility for the forthcoming quarters. On the back of reduced cyclicality in earnings, lower cost of production compared with peers, sustainable cash flows and increasing return ratios, we assign a PE multiple of 3.5 times to FY21E EPS to the stock and maintain our current target price,” the brokerage said.

Low-cost carrier SpiceJet benefited from the grounding of Jet Airways in April, and reported a record profit of Rs 261.7 crore for June quarter against a net loss of Rs 38.1 crore in the corresponding period last year.

The airline reported total revenue of Rs 3,145.3 crore for the April-June period against Rs 2,253.3 crore reported for the same period in FY19, a growth of 39.5 per cent. Centrum Broking is positive on SpiceJet with a price target of Rs 160.

“We expect robust 28 per cent domestic traffic growth for SpiceJet in FY20 (in an otherwise tepid market), driven by swift fleet additions, new route launches and market share gains,” Centrum said in a report.

Market experts are also bullish on Muthoot Finance despite the ongoing turmoil in the midcap and smallcap space. Brokerage Narnolia believes the stock can hit Rs 705 in the coming months.

“Muthoot Finance has been growing at a 15 per cent consistently for the past couple of quarters. It has not been affected much by the liquidity crisis due to heavy monthly collection running up to Rs 6,000 crore,” the brokerage said in a report.

Among others, shares of Brigade Enterprises, Vinati Organics, Eldeco Housing and IOL Chemicals rallied 45-50 per cent in last one year.

Brigade Enterprises (BEL) posted its highest-ever quarterly sales for June quarter at 1.1msf (up 165 per cent YoY) valued at Rs 590 crore (up 172 per cent YoY).

Edelweiss Securities said RERA-driven consolidation and the ongoing liquidity crisis bode well for organised players such as BEL. “We remain positive on BEL’s long-term growth prospects even as upsides in the near term may be capped,” the brokerage said and maintained its price target at Rs 289.