NEW DELHI: Even as India's headline equity index hit a record high of 18,611.05 on Monday to surpass its previous peak touched 13 months ago, at least 12 bluechip stocks have eroded wealth in double-digits, with Wipro leading the pack of losers.
Since the last peak of 18,604 touched on October 19 last year, Wipro has been the top drag on the index by losing over 43%. Divi's Laboratories, Tech Mahindra, BPCL, and Tata Steel have lost over 20% each during the period, shows data from ACE Equity.
Other top losers include Hindalco, HDFC Life, Bajaj Finserv and ONGC.
The upside in the pack of 50 stocks has been led by ITC, Mahindra & Mahindra, Bharti Airtel, Eicher Motors, and Coal India, which are up between 25-38% each. Adani Enterprises, which joined Nifty in September-end this year, delivered a staggering return of 148% during the period.
Within the Nifty 500 pack, at least 13 stocks have given multibagger returns, with Mazagon Dock, Raymond, Adani Total Gas, Adani Enterprises, RVNL, and Shoppers Stop among the top gainers.
What should investors do?
Amid concerns over recessionary headwinds eroding margins and growth outlook, IT stocks have been the worst performers in the calendar year 2022. While one set of long-term value investors believe that the relatively cheaper valuations make IT stocks more attractive now, others warn that the global economy is headed toward a slowdown in 2023.
As capital continues to rotate across sectors, bank stocks stand out as top favourites amid rising net interest margins (NIMs), improvement in asset quality, and healthy credit growth.
"We believe that the tier-2 banks such as public sector and regional banks have better upside than the frontline banks," Kotak Institutional Equities had said in a recent report while upgrading fair values for stocks to reflect greater business confidence.
Apart from the earnings strength seen in Q2, the demand has been buoyant in the festive season. "Bank credit continues to grow in the late teens over the last few months and is expected to continue this uptrend with the pickup in capex from H2. India is entering a big capex upcycle which would provide leg-up to the overall economy," said Ajay Menon, MD & CEO, Broking & Distribution, Motilal Oswal Financial Services.
Global brokerage Morgan Stanley's equity strategist Ridham Desai said an up-trending profit cycle, a likely peak in short rates in 2023, and ebbing global macro risks relative to 2022 make a case for absolute upside to Indian stocks.
It has a Sensex target of 68,500, implying an upside potential of 10% by December 2023.
(With data inputs from Ritesh Presswala)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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