Companies whose Q3 earnings exceeded estimates emerged as outperformers

NEW DELHI: The two key benchmark stock indices of India — Sensex and Nifty— have plunged over 8% since the beginning of the current year, while BSE’s mid-cap and small-cap indices have dropped 9% and 13%, respectively. The fall has resulted in these indices slipping below their 200-day moving averages (DMA) — a key sentiment indicator. But, there are a few stocks that have fallen less than the benchmark indices or even gained and are trading above 200-DMAs. This suggests informed investors expect these stocks to stay relatively resilient during these testing times.

Around 48 stocks in the BSE500 index are now trading above 200-DMAs and have performed better than the Sensex since January 1. These include RIL, Infosys, IOC, BPCL, Asian Paints, Apollo Hospital, Petronet LNG, HPCL, TVS Motors, Mindtree and Torrent Power among others.

Analysts said the outperformers in the recent correction have been those whose December quarter earnings have exceeded estimates. "Investors are now only rewarding those companies which are showing growth in earnings," said Pankaj Sharma, head of equities at Equirus Capital. Oil & gas and auto stocks have dominated the largecap list, while Infosys has been the strongest on account of its betterthan-expected earnings. "Stocks which have run up sharply without the support of fundamentals have tumbled, while investors are still betting on stocks with clear cut earnings growth visible," said Chokkalingam G, founder, Equinomics Research & Advisory.