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  • Apr 8, 2022 - Top 5 Best Performing Stocks Since the March 2020 Crash

Top 5 Best Performing Stocks Since the March 2020 Crash

Apr 8, 2022

Top 5 Best Performing Stocks Since the March 2020 Crash

The Indian stock market saw one of the biggest crashes in its history in March 2020.

From a peak of 42,270 in February 2020, the Sensex fell to 25,630 in March 2020, a fall of 39% in just 40 days due to the pandemic.

However, after the crash, the market zoomed. The BSE Sensex more than doubled and touched an all-time high of 62,245 in October 2021.

Low-interest rates led to high liquidity which drove this rally even as slow economic growth, inflation, and the threat of new Covid variants loomed.

During this rally, several stocks have given more than 1,000% return. Here are the top five.

#1 Saregama

First on our list of top-performing stocks is Saregama India.

The stock has given a return of 2,114% in the last two years.

Saregama is one of India's oldest and largest recording and publishing companies. It has a music library of over 1.3 lakh songs across 18 languages.

After launching a digital music player under the brand name Caravaan and setting up a production house (Yoodlee Films) to produce films in 2017, the company came into the limelight again after being a victim to music piracy for more than a decade.

In the last five years, the company's revenue has grown at a compound annual growth rate (CAGR) of 15.3%.

Despite the pandemic, the company saw a surge in revenue mainly because of the high growth of its licensing business through digital penetration.

Its profit also grew at a CAGR of 67.3% during the same period.

Saregama has zero debt and positive free cash flows indicating good liquidity. If the company plans to expand its business, it doesn't have to rely on external sources for funds in a rising interest rate economy.

#2 Adani Total Gas

Second on our list is Adani Total Gas, India's largest gas distribution company.

The stock has given over 2,151% return since the March 2020 crash.

Adani Total Gas is engaged in the business of marketing and distribution of piped and compressed natural gas for domestic, commercial and industrial purposes.

Along with France's Total Group, the company manages a distribution network across 19 geographical areas across the northern states of India.

It also manages 19 geographical areas in partnership with the Indian Oil Corporation across the southern states of India.

Adani Total Gas's standalone revenue has grown at a CAGR of 9.1%, led by increasing volumes in the last five years.

Its profit also grew by a healthy CAGR of 36.1% during the same period.

Going forward, the company is planning to grow its geographical footprint rapidly. It has bid aggressively for city gas distribution authorisation and has won 29 new locations in three different bidding rounds.

However, setting up gas distribution pipelines across these locations requires a capex of Rs 50-55 bn in the next five years, which Adani Total Gas plans on raising through a mix of debt and equity.

The joint venture of Adani and Indian Oil Corporation has won 10 new geographical locations in two different rounds of bidding. A capex requirement of Rs 65 bn is expected in the first five years.

Adani has already contributed a certain portion of the equity to this in September 2021. In the next few years, Adani Total Gas will be contributing the rest of its share to this.

Given an already high level of debt in the books and inadequate free cash flows, these expansion plans might increase the books' burden if the interest rates go up.

#3 Adani Green Energy

Next on our list is India's largest renewable energy company, Adani Green Energy.

The stock has given investors around 1,773% return in the last two years.

Adani Green is primarily engaged in the business of generating power from renewable sources like solar and wind power.

It also builds and maintains utility-scale, grid-connected solar and wind farm projects.

The company has a total power generating capacity of 19,340 megawatts (MW) and has a vendor base of more than 20,000 to distribute power across India.

Its revenue has grown at a CAGR of 41% in the last five years, led by higher volumes due to improved power generation capacity. Its profit has also grown by a CAGR of 30% during the same period.

Going forward, Adani Green plans to expand its power generating capacity through greenfield and brownfield expansions. In the financial year 2021, it had 15,870 megawatt under-construction and locked-in growth projects.

It's funding all its capex majorly through debt from holding companies, debentures and foreign currency loans. With the US Federal Reserve all set to hike interest rates to combat inflation, Adani Green might feel the burden on its books as it couldn't generate positive free cash flows in the financial year 2021.

#4 Adani Enterprises

Fourth on our list is Adani Enterprises, India's largest listed business incubator.

Its stock price has risen by over 1,528% in the last two years.

Adani Enterprises primarily focuses on establishing new businesses in natural resources, transport and logistics, and utility and strategy segments.

It has widened its presence across several industries, including integrated resource management, mining, solar manufacturing, airports, edible oil, defence, and aerospace.

Recently the company also ventured into new businesses such as airports, data centres, and water treatment plants.

In the last five years, Adani Enterprises' revenue has grown at a modest rate of 1.2%, led by lower growth of the integrated resource management business. Its profit saw de-growth of 1.6% during the same time.

Adani Enterprises recently entered into multiple new businesses in which it has no experience.

For the execution of these projects, the company will be incurring a heavy capex of Rs 250 bn in the next two years, which it plans to raise through direct and indirect debt.

With a debt of almost Rs 160 bn in its books, and a high short term working capital debt, the additional debt will expand its liabilities and increase its interest costs.

The promoters have already pledged around 4% shares to raise capital for its expansion plans.

The company is also incubating businesses that are capital intensive with long gestation periods. This increases the burden of generating good cash flows.

Hence any rise in the interest rates can affect the profitability of the business.

#5 Adani Transmission

Last on our list is Adani Transmission, a power transmission and distribution company.

The stock has given around 1,314% returns in the last two years.

Adani Transmission, along with its subsidiaries, is engaged in the business of power generation, transmission and distribution across several states, including Bihar, Jharkhand, Uttar Pradesh, Maharashtra, and Madhya Pradesh.

It currently operates 18,500 circuit km of transmission lines and has a power transformation capacity of 20,400 megavolt amperes (MVA).

In the last five years, its revenue has grown by a CAGR of 30.7%, driven by the growth of its transmission business.

Its profit also grew by a CAGR of 25.3% during the same period.

Adani Transmission's shares are currently trading at a P/E of 219.34 against its intrinsic P/E of 81.2 in the financial year 2021, indicating the shares are highly overvalued.

Going forward, it aims to have 20,000 circuit km of transmission lines by the end of 2022. For this, it might incur a capex of Rs 14-15 bn, which it plans to fund through internal sources.

Given a high level of debt in its books and a low-interest coverage ratio, funding the capex through internal sources can benefit the company in a rising interest rate scenario.

Will these stocks continue to give good returns for the next two years?

Investors who invested in the above stocks have made good returns in the last two years.


The last 24 months were a one-way street; there were so many new investors in the market, and the interest rates were also low. As a result, the liquidity was high, and the stock market was bound to give good returns.

However, it doesn't mean these stocks will continue to give good returns in the next two years.

The market has been facing several corrections in the last few months due to new variants of Covid and the ongoing war between Russia and Ukraine.

Moreover, several new investors who joined the market during Covid are also liquidating their investments.

The market is very volatile currently, and it is difficult to predict its direction for the next few weeks.

However, if a stock has strong fundamentals, good revenue and profit growth, adequate liquidity, and low leverage. In that case, it will have high chances of sustaining market volatility in the long term.

Short-term returns can be very intoxicating, but that shouldn't lure you to invest in a company. Check for the company's fundamentals and valuations, and then decide where to put your money.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.

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