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Meet 14% of stocks which are swimming against the tide on Dalal Street this year

Shares of Tata Sponge and MM Forging plunged 20 per cent and 10 per cent so far in 2018.

Oct 10, 2018, 12.15 PM IST
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If you are in panic seeing nearly 90 per cent of the stocks in red, remember it is amid such fears that equity investors make money.
An aerial view of domestic equity market shows all blood on Dalal Street, with almost the entire landscape painted in the red so far in 2018.

However, 14 per cent of the stocks from the BSE-listed universe have managed to buck the trend and swim against the tide.

Of the 2,472 liquid stocks on BSE, 343 from across sectors such as chemicals, finance, paper, information technology, auto ancillary, textile and consumer discretionary, among others, have managed to deliver positive returns to investors despite the heavy selloff in midcap and smallcap segments through January-September 2018.

With a 973 per cent rally, Sadhana Nitro Chem emerged top gainer on the exchange. The stock rallied from Rs 95.10 on January 1 to Rs 1,020 on October 9.

Coastal Corporation has delivered the second best return this year so far, soaring 975.69 per cent to Rs 178.30 from Rs 16.90.

Despite a tough environment for microcaps, smallcaps and midcaps, Tiaan Ayurvedic, Electrosteel Steels, Apollo Finvest, Darjeeling Ropeway, Gradeur Products, Satia Industries, Urgo Capital, Atlas Jewellery India, RMG Alloy Steel, GSS Infotech, Swaraj Automotives, Dolat Investment and Dalal Street Investments have rallied over 200 per cent during this period.

The BSE Midcap and Smallcap indices slipped 23 per cent and 30 per cent, respectively, till October 9 this year, while the BSE Sensex gained 1 per cent in the same period.

“As an investor, I have nothing to do at this point of time. Investors have to only wait and watch. This is a typical market panic, and we have gone through many such corrections and cycles. Every cycle, every correction is unique. That is what I believe,” says Porinju Veliyath, founder and CEO, Equity Intelligence India.

If you are in panic seeing nearly 90 per cent of the stocks in red, remember it is amid such fears that equity investors make money.

“Investors should not forget that such fearful situations, sharp corrections and crashes have happened many times in the past and every time, the market has bounced back. So, it is not the end of the world. As many people may be thinking at this point of time, this is not something happening for the first time,” Veliyath told ETMarkets in an interview.

Among the others, 21 stocks rallied between 100 per cent and 200 per cent on BSE so far in 2018. Some of the names on the list included Fairdeal Filaments, Punjab Alkalies & Chemicals, Rama Paper Mills, Birla Cable, Merck, Excel Industries and Mangalam Organics.

Sectorwise, private sector lenders Kotak Mahindra Bank and HDFC Bank delivered up to 11 per cent of return to investors during the same period, whereas shares of Axis Bank, ICICI Bank and YES Bank plunged up to 29 per cent.

Cable players Birla Cable and Universal Cables jumped 111 per cent and 5 per cent, respectively.

Bata India (up 15 per cent), V-Mart Retail (up 37 per cent), Avenue Supermarts (up 17 per cent), Aditya Birla Fashion (up 3 per cent) and Future Lifestyle (up 14 per cent) have also moved against the wind so far.

Abhimanyu Sofat, VP-Research, IIFL, says there are plenty of opportunities for those looking for options in this market after the correction

“There are always opportunities in the market. In the smallcap space, something like a Tata Sponge looks quite interesting. From the auto sector, MM Forging looks interesting, considering that 60% of its business comes from exports and with tailwinds of Series-8 trucks growth in the US being strong along with the currency depreciation and domestic HCV industry also doing pretty well, that stock is a decent option to accumulate,” he said.

Shares of Tata Sponge and MM Forging plunged 20 per cent and 10 per cent so far in 2018.

“Among the largecaps, we are more bullish on private sector lenders like ICICI and Axis Bank as well as stocks like Reliance Industries, where one should look to add positions on any downtick,” Sofat said.
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