3 of every 4 stocks destroyed wealth in Samvat 2075, top gainers rallied up to 1,800%

Samvat 2075 left investors high and dry on Dalal Street, as the stock market produced only one wealth creator against every four that ruined wealth since last Diwali (on November 7, 2018).

Those who spotted them at the right time must be feeling lucky. In the broader market, BSE Smallcap and Midcap in dices retreated up to 11 per cent during this period.

BSE Sensex advanced 11 per cent between November 7, 2018, and October 17, 2019, amid brisk buying on select blue chip counters.


Among the gainers, select stocks swelled wealth by up to 1,800 per cent.

From among blue chips, oil-to-telecom major Reliance Industries advanced 26 per cent to Rs 1,396 from Rs 1,110 during the Samvat year that ends on October 26.

Among other, HDFC Asset Management Company and InterGlobe Aviation advanced 91 per cent and 80 per cent, respectively. Oil marketing firm Bharat Petroleum Corporation rallied 77 per cent (largely on talks of its possible sell by the government), Bajaj Finance rose 75 per cent, Siemens 72 per cent and Berger Paints 63 per cent.

Insurers had a field day, with SBI Life Insurance and HDFC Life Insurance rallying in excess of 50 per cent. Jewellery maker Titan also gained by equal measure.

“Midcaps and Smallcaps become the flavour of the market, when there is ample risk appetite. Investors tend to prefer largecaps in times of risk aversion. In the current context, largecaps are trading above their mean valuations while midcaps and smallcaps trade at discounts to their mean valuations,” said Pankaj Bobade, Head of Fundamental Research, Axis Securities.

With a 1,800 per cent rally, legal, accounting and tax consultancy firm Sahyog Multibase emerged the biggest gainer among the second-rung stocks during the Samvat year.

Besides Sahyog, 11 other stocks also more than doubled investor wealth. They included ABans Enterprises (up 137 per cent), Generic Pharmasec (up 188 per cent), Adhunik Industries (up 177 per cent), Kavit Industries (up 163 per cent), Shree Global Trade fit (up 393 per cent) and Aavas Financiers (up 156 per cent).

Jump Networks, Everest Organics, Gala Global Products, Dolat Investments and Apollo Tricoat also rallied over 100 per cent. This list included only those companies which had a market value of over Rs 100 crore.
“As risk appetite returns to the market, market participants would again favour quality midcaps and smallcaps while largecaps with sustained good growth will continue to command rich valuations,” he said.

Among other known names, Adani Green, Adani Gas, Maharashtra Scooters, Ion Exchange, Bata India, Manappuram Finance, Reliance Nippon Life Asset Management, PI Industries, Vadilal Industries and Godrej Properties have gained between 50 per cent and 100 per cent since last Diwali.

“In troubled times, quality stocks with reputed managements, strong balance sheets and healthy growth trends perform well. It is once again proven that chasing momentum stocks is always a risky proposition,” brokerage Sharekhan said in a report.

The market as a whole remained highly volatile through the past one year amid major challenges like growth slowdown in the domestic economy, recession fears in the global economy, trade war and geopolitical tensions, general elections, a budget proposal for additional tax on foreign portfolio investors and changes in public shareholding.

HDFC Securities sees Sensex at 42,800 by next Diwali as it expects earnings growth recovery, better monsoon and a Sino-US trade deal to drive the market in the new Samvat year.

Sensex hovered at 39,089 on Wednesday.
Cox & Kings (down 99 per cent), Talwalkars Healthclubs (down 97 per cent), McLeod Russel (down 95 per cent), Reliance Capital (down 95 per cent), Reliance Communications (down 95 per cent) and Reliance Infra (down 95 per cent) emerged top wealth destroyers of Samvat 2075.