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Top wealth creators of 2019: Stocks that defied odds to rally up to 2,200%

Among these stocks, 26 more than doubled investors’ money in a year.

, ETMarkets.com|
Last Updated: Dec 16, 2019, 04.53 PM IST|Original: Dec 16, 2019, 12.46 PM IST
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The start of Calendar 2019 was marked by a lot of uncertainty and concerns in the financials space. The outcome of the general election was surprisingly decisive, and it became a key factor to hold up stock valuations.
Calendar 2019 remained a confusing year for investors as the broader market remained sluggish amid tremendous selling pressure even as equity benchmarks Sensex and Nifty scaled record highs.

However, a couple of stocks defied the trend and stepped out of this pattern to deliver up to 2,200 per cent return for the year till December 13. On a year-to-date basis, smallcap firm Best Agrolife soared the most at 2,192 per cent to Rs 260. It was followed by ABans Enterprises (up 976 per cent), Leading Leasing Finance (up 286 per cent) and Kavit Industries (up 258 per cent).

The start of Calendar 2019 was marked by a lot of uncertainty and concerns in the financials space. The outcome of the general election was surprisingly decisive, and it became a key factor to hold up stock valuations. A few missteps in the Budget then added to the macro-economic worries, forcing the government to roll back those measures and later announce a series of new steps to try and turn around the economy.

These have revived hopes that the economy will soon be able to stem the slowdown and turn the ride over the medium term.

Now, the market’s hope for a turnaround in the broader market hinges on this trend reversal in the macro-economy. Despite a rally in the select second-rung counters, Amar Ambani, President and Head of Research at YES Securities, says the consolidation in midcaps and smallcaps will continue for the major part of Calendar 2020.

“The midcap cycle ended in early 2018 and you would not see a bounceback anytime soon. We do not expect Calendar 2020 to be a great year for midcaps and smallcaps. There is a chance of 15-20 per cent rally in them, if Nifty keeps on moving upwards. For a fresh cycle to emerge in midcaps, we have to wait till the end of 2020 or 2021,” he said.

Among the stocks that defied the broader market downtrend in 2019, 26 more than doubled investors’ money in a year. They included Adani Green, Parle Industries, Jump Networks, Aavas Financiers, Reliance Nippon Life Asset Management, HDFC AMC and CreditAccess Grameen.

Ambani says select private banks, PSU lenders such as SBI and insurance companies should be able to generate robust alpha in 2020.

Brokerage Dolat Capital expects telecom, public sector undertakings to be top themes to play in 2020.

Commenting on the telecom sector, Dolat Capital said: “After battling the flurry of bad news on the regulatory front and hyper-competition in the trailing three years (SC’s AGR blow being the most recent), we expect the news flow to remain positive on tariffs and/or relief measures.”

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Table 1 stocks rallied over 100%

On BSE, 66 other stocks gained between 50 and 100 per cent during Calendar 2019. Cantabil Retail India jumped 99 per cent to Rs 253.10 as of December 13 from Rs 127.50 on January 1.

Among other top gainers were Hindustan Foods (up 98 per cent), Ion Exchange (up 97 per cent), Astrazeneca Pharma (up 94 per cent), Radix Industries (up 93 per cent), Ozone World (92 per cent) and HLE Glascoat (up 92 per cent).

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Table 2 stocks jumped between 50- 100

Buying in select heavyweights took Sensex higher by nearly 14 per cent during the calendar year. With a 54 per cent gain, Bajaj Finance emerged the top gainer followed by ICICI Bank (up 49 per cent), Bharti Airtel (up 49 per cent), Reliance Industries (up 41 per cent), Kotak Mahindra Bank (up 35 per cent) and Asian Paints (up 21 per cent).

While the rally in top-rung stocks has started rubbing off on some of the second-rung stocks in recent days, the BSE Smallcap and Midcap indices are still down 9 per cent and 4 per cent, respectively, on a year to date basis.

The top wealth destroyers of the year would easily be Cox and Kings (down 99 per cent), GBL Industries (down 99 per cent), Talwalkars Healthclubs (down 97 per cent), McLeod Russel India (down 95 per cent) and Reliance Capital (down 95 per cent).

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Table 3 top losers

Arun Kejriwal, CEO at KRIS Research & Advisory, sees value in those midcaps, which were able to withstand the storm that hit Indian equity market in 2019.

“It’s been a tough time for corporate India. Only those players which have been able to cut cost and at least hold on at current rate of sales, even if without much growth, are the counters you should look at. In the NBFC space, small finance banks, housing finance players and companies related to the microfinance space look interesting to me,” he said.
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