What the Top Gainers and Losers of BSE 30 Teach You About Investing

The year 2022 began with the promise of a booming stock market.

Especially when the BSE Sensex closed at 61,308.9 on 17 January 2022, which was only 936 points or 1.5% less than the all-time high of 62,245.4.

But this promise did not last long as what followed was a very sharp fall in the markets.

On 7 March 2022, the Sensex closed at its six-month low of 52,842.8. Yet again, the Sensex recovered rapidly after the big fall. Within one month it was back on an upward trend.

The highest closing price of April Month was 60,611.7 (closing price on April 4 2022). After this, the Sensex started falling again. On 12 May 2022, the Sensex closed at 52,930.

So you know how volatile the market has been since the beginning of this year.

During times like these, an investor needs to be extra careful while investing as a specific trend cannot be identified in such a market.

In these circumstances, let's analyse the top gainers and losers. It will give you an idea about what kind of stocks will survive in this market and which stocks to avoid.

Let's start with the gainers first.

Top Gainers from the BSE 30

#1 National Thermal Power Corporation (NTPC)

Since the start of the year, shares of NTPC have gone up by 19%.

The share price saw a sharp rally after the company announced it has achieved the highest ever electricity generation. It generated 360 bn units of electricity in fiscal 2022. This is 14.6% higher than the electricity production of fiscal 2021.

It also recorded the highest single-day production of 1,215.7 MU. The company's production capacity increased by 4.7% this year. Now the total production capacity stands at 68,940 MW.

Thus, owing to the phenomenal performance and expertise, shares of NTPC have increased.

To know more about the company, check out NTPC's factsheet and its latest quarterly results.

#2 ITC

Since the start of the year, shares of ITC have gone up by 16%.

ITC shares have been increasing post-budget. This is because the budget did not mention any tax rise on cigarettes or tobacco. This means no extra excise duty on products of ITC.

Post pandemic period the consumption of cigarettes has increased. From the total revenue of ITC 46% comes from cigarettes. Hence, when the consumption of cigarettes increases ITC's financials improve.

Another effect of post pandemic period is that people have started traveling again. As a result of which ITC hotels are also booming. The occupancy rates in hotels is back to pre-covid period. The hotel segment registered a growth of 100% in December quarter.

Wheat prices have gone high considering Russia Ukraine war situation. This will potentially benefit ITC because now that wheat will not be available from Russia and Ukraine, ITC may be able to export wheat.

Alternatively, it may also be in a position to export rice because the demand for wheat may fall due to price rise.

Further, ITC is slowly shifting its funds from its businesses that are loss-making/less profitable to profitable ones. This improved the overall performance of the company and consequently, the share price also increased.

All these reasons together make ITC a top gainer this year.

To know more about the company, check out ITC's factsheet and its latest quarterly results.

#3 Power Grid Corporation of India

Since the start of the year, shares of Power Grid have gone up by 15%.

Power Grid is a public sector undertaking that is involved in the business of power transmission. It's India's principal power transmission company. 90% of interstate and inter-regional electric power transmission system is owned and operated by Power Grid.

As of 30 April 2022, it has 172,557 km long transmission lines. It also has 265 sub-stations and 476,772 MVA transformation capacity.

It's an Indian PSU that is not limited by the boundaries of India. The Power Grid has international clients. It's present in 21 foreign countries and has more than 25 international clients. It provides transmission-related consultancy services to more than 150 domestic clients.

It's exploring new business opportunities in the field of smart grid, smart city projects, energy audit, and energy efficiency, integration of solar power projects, offshore wind generation integration, and distribution.

The sales of Power Grid have shown an increasing trend.

To know more about the company, check out Power Grid's factsheet and its latest quarterly results.

Top Losers from the BSE 30

#1 Wipro

Since the start of the year, shares of Wipro have gone down by a massive 34%.

Shares of Wipro have been rapidly falling because the financial results of the company were not as per investor expectations. Revenue increased by 3.1% but its margin reduced by 13%.

The company has also made huge investments which reduced the profits. It hired 45,416 employees in fiscal 2022, which is a very high number.

Another factor is high attrition. Attrition rate means the rate at which employees leave the company. A higher attrition rate will result in new hiring. When new people are to be hired by a company its cost increases.

The attrition rate in first half of fiscal 2022 was 22.7% which led to hiring more employees. Its financial performance for the past two quarters has left the investors disappointed.

Adding to worries, the Nasdaq index, which has the technology securities listed in US, is under immense pressure. Indian IT stocks basically mirror the US trend.

To know more about the company, check out Wipro's factsheet.

#2 Tech Mahindra

Well, what do you know...another IT stock forms part of the top losers list. This has been the case for most IT stocks this year.

Since the start of the year, shares of Tech Mahindra have gone down by 32%.

Tech Mahindra reported a high attrition rate. Hence the margin of Tech Mahindra was impacted. It has reported a very slow growth of profits this year.

Brokerage houses are of the view that the company will report lower profit margins in the future. They had raised their concerns regarding the falling margin.

It appears due to falling margins and increased costs, shares of Tech Mahindra are falling.

To know more about the company, check out Tech Mahindra's factsheet and its latest quarterly results.

#3 Dr Reddy's Laboratory

Since the start of the year, shares of Dr Reddy's Lab have gone down by 21%.

Dr Reddy's is a reputed Indian pharmaceutical company that has a worldwide presence. It has its presence in 56 countries where they either have research and development centres or manufacturing facilities or a commercial presence.

Its major markets are in the USA, Russia, India, and CIS countries. These major markets are the major reason behind the major share price fall of the share price.

As the situation was tense between Russia and Ukraine, shares of Dr Reddy have been falling. The situation worsened when Russia announced military attacks on Ukraine.

Revenue from Russia forms around 8% to 9% of the consolidated revenue of Dr Reddy. Ukraine's revenue forms around 2% of total revenue. Dr Reddy's sale to Russia forms 50% of total exports to Russia from India. Sales to Ukraine form 30% of the total exports of India to Ukraine.

War is the primary reason behind the falling share price of Dr Reddy's shares.

To know more about the company, check out Dr Reddy's factsheet.

#4 HCL Technologies

Since the start of the year, HCL Tech shares have gone down by 20%.

The revenue of HCL has increased as compared to last quarter. Still, the share price is falling because the profit margin has reduced.

In the March quarter, the operating margin remained at 19% which was lower than the investor expectations. The reason for such an operating margin is the huge attrition rate. The attrition rate is almost double that last year.

To know more about the company, check out HCL Technologies' factsheet and its latest quarterly results.

The key takeaway...

Times are adverse for investing in stock markets. But there is always an opportunity in the face of adversity. An investor has to look for the right time to invest in the right stock.

You could pay attention to the following sectors:

The power sector is booming. There are many reasons behind this. One of the major reasons is the increasing demand for electric vehicles (EVs).

EVs seem to be the next big thing in the automobile industry. Hence it seems that the power sector will remain on the greener side of the grass.

In the post-pandemic period, the demand for goods that fuel the economy has increased. The goods which help develop the infrastructure of the country are in demand. Hence these companies will continue to have a higher share price at least in the near future.

Technology stocks are taking a hit worldwide. All technology companies are under huge cost pressure. The huge attrition rate is another reason for the downfall of technology stocks.

Even companies with strong financials are not able to stand the storm of downfall. Thus technology stocks seem to be unattractive for short-term investing at present.

The share markets are highly volatile these days. Trends cannot be predicted. Companies with strong fundamentals are also facing a downfall.

Hence considering all the above reasons, be extra careful while investing.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...