How 2021's Biggest Gainers have Fared in 2022 so Far...

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  • May 19, 2022 - How 2021's Biggest Gainers have Fared in 2022 so Far...

How 2021's Biggest Gainers have Fared in 2022 so Far...

May 19, 2022

In 2021, Indian share markets (and equity markets across the globe) were surging high, riding on easy liquidity.

In October 2021, India's benchmark BSE Sensex reached its highest level at 62,245. The all-time high level for Sensex was short lived and it soon came crashing down.

As things stand now, the markets are not painting a clear picture. 2022 has seen a lot of ups and downs. One day, the markets are up 1% while the next day, it falls like there's no tomorrow.

Clearly, 2022 has been a major disappointment for investors. The Sensex is down 10% this year.

In 2021, almost all stocks saw a sharp rally. But what has happened to these stock in 2022 so far?

Are those multibagger stocks still riding high? Or are they in steep losses this year? Read on to find out how the top performers of 2021 are performing now.

#1 Brightcom Group

Buying shares of Brightcom Group in 2021 was like farming money.

The stock registered a growth of 2,518% in 2021, rising from Rs 4.1 to Rs 107.4. It means that if you had invested Rs 1 lakh in Brightcom Group shares, the same would have turned to a little over Rs 26 lakh in just one year.

The rise in Brightcom Group shares may be linked to the company's good financial performance, a plethora of favourable events, and business expansion.

The company's performance has improved due to increased use of digital media and digital channels to conduct commerce across the world.

In mid-2021, the company issued bonus shares to shareholders. The bonus share ratio was 1:4 i.e. one share for every four shares held.

The company was also paying off its debt. By the end of 2021, Brightcom Group was a debt-free company. A debt-free company is considered relatively safe for investing.

In 2021, Brightcom Group issued fresh equity shares worth Rs 5,300 m to foreign and other investors. It also issued share warrants amounting to Rs 15 m to ace investor Shankar Sharma. These warrants could be converted into equity shares of the same amount.

So Brightcom Group had taken steps to increase market capitalisation in 2021. Owing to all these reasons, the stock price jumped.

However, in 2022, the stock is in a downward trend. By March 2022, the share price fell to Rs 55.7 from Rs 100. That's a fall of 40% so far this year.

One of the reasons for the downfall is the issue of bonus shares. Whenever bonus shares are issued, the share price falls in the proportion to the bonus share ratio. Recently, it issued bonus shares in the ratio of 2:3 i.e. two new shares for every three shares held.

The business of Brightcom Group is divided into three sectors: Media (Ad-Tech and Digital Marketing), software services, and future technologies. A major chunk of the business is in software services.

Indian IT stocks have been falling in 2022. The reason is the fall in the tech heavy Nasdaq in the US.

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

#2 Tata Teleservices (Maharashtra) (TTSM)

Through the year 2021, the share price of Tata Teleservices went rallying up and never looked back.

It rose 2,497% in 2021. It means that if you had invested Rs 1 lakh in TTSM you would have made a gain of Rs 2,497,000 in just one year.

Interestingly, TTSM is stuck knee-deep in losses. It has made profits only in two quarters out of last 82 quarters.

Its current liabilities are more than current assets. The firm has high debt. All these signs are against the company. So, why did the share price rise in 2021?

No matter how bad a child is, a family never gives up on the kid. The same happened with TTSM. When TTSM faced illiquidity, it obtained a letter of support from Tata Sons. Tata Sons infused a lot of funds.

A turnaround strategy is under implementation for TTSM. It's being revived in a new avatar called Tata Tele Business Services (TTBS).

TTBS has launched a cloud-based communication platform called Smart Flo.

Due to this, the share price of Tata Teleservices was shooting through the roof. It reached an all-time high of 290.2 on 11 January 2022.

At present, shares of the company trade at Rs 131.5. This translates into a loss of 37% in 2022 so far.

However, shares did not see a continuous downfall in 2022. They went as low as Rs 93.6 on 8 March 2022 but started rising post that.

TTSM shares surged too much in 2021. Hence a correction was in order.

On 10 January 2022, TTSM announced its plan to issue shares to cover the interest of its AGR dues.

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

#3 GRM Overseas

Like paddy fields are logged with water, investors of this rice stock were loaded with huge profits in 2021.

GRM Overseas shares showed a growth of 1,656% in 2021. It means if you had invested Rs 1 lakh at the start of 2021, you have made a gain of Rs 16.5 lakh in just one year.

The sharp rally was the result of the strong financials for fiscal 2021. In the quarter ending December 2021, the company reported a rise of 350% in its net profit and 39% in sales YoY.

Its annual profit rose by 43.3% in fiscal 2020-21 as compared to the previous year's profit.

The company is growing slowly. It's planning to expand operations globally. The company has already launched its own branded products in Europe.

Owing to its exceptional growth and future growth prospects, shares of GRM Overseas were rallying.

The upward trend was even seen at the beginning of 2022. It reached its 52-week high on 20 January 2022 at Rs 935.4.

On 10 January, the company announced the rice brand of its subsidiary would be available on Udaan. Udaan is the B2B trade platform built for traders, wholesalers, retailers, and manufacturers.

By then the share markets were experiencing volatility. As a result, the stock of GRM Overseas also started correcting.

At present, GRM Overseas share price trades at Rs 369.5. It has fallen 42% in 2022.

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

#4 3I Infotech

3I Infotech is a mid-tier IT firm. Shares of the company were temporarily delisted on 30 August 2021. The delisting was done to enable the implementation of a debt restructuring scheme.

Under the scheme of debt restructuring, the face value of equity shares of the company was reduced from Rs 10 to Re 1. Thus, there was a 90% capital reduction in the company.

In 2021, the company issued big statements like it aims to bring in a 5G network, be a one-stop tech solution company, become a debt-free company, etc.

3I Infotech did become a debt-free company by selling one of its subsidiaries.

Owing to the above reasons, shares started shooting up after it relisted on the bourses. The shares were relisted on 22 October 2022. By year-end the share price had jumped 1,353% compared to the year-end price of 2020.

However, the price rise was based on easy liquidity and optimistic statements made by the company. Hence, when the effect of those statements started wearing off, the share price started falling.

The stock saw a sharp decline on 17 December 2021. Post this, it has been falling at a fast pace.

IT stocks have been hammered globally. Declining profit margins and high attrition rates has led to a rapid fall in stock prices. 3I Infotech is no exception to this. It has fallen 46% since the beginning of 2022.

To know more about the company, check out 3I Infotech's factsheet and its latest quarterly results.

Top performers of 2021 and how they're faring in 2022 so far...

Here is the list of top 10 performers of 2021 and how they performed in 2022 so far.

Top performers of 2021

Sr No Company
Name
Closing on
17-05-2022
Performance
in 2021 (%)
Performance
in 2022 (%)
1 Brightcom Group 63.5 2,518 (41)
2 Tata Teleservices (Maharashtra) 131.2 2,497 (37)
3 GRM Overseas 369.5 1,656 (42)
4 3I Infotech 51.1 1,353 (46)
5 RattanIndia Enterprises 43.6 604 (8)
6 Saregama India 414.9 529 (21)
7 PTC Industries 4,065.0 497 (18)
8 Olectra Greentech 580.7 488 (27)
9 Share India Securities 1,282.2 479 (23)
10 PG Electroplast 650.0 467 (19)
Source: Equitymaster

The Takeaway?

The stock market is an expensive place to learn investing. The market takes away your money first and then gives you the lesson.

This has been the story of the top gainers of 2021. Stocks riding high on easy money have come crashing down.

Surely, more stocks from will go down this year compared to last year.

As we've written before, 2022 will be a difficult year for investors. There is a higher chance of losing money over the coming months compared to any period since March 2020.

And that's exactly what has been happening. Currently, the markets are extremely volatile. So you must be extremely careful in selecting the best stocks to invest.

Here's what Co-head of Research at Equitymaster Tanushree Banerjee has to say about selecting stocks...

  • The profits hereon won't be easy money. You will need to carefully select your stocks, assess the risks, insist on a margin of safety, and make timely exits.

    The reason I say this is because, the trend of too much money chasing too few good stocks is reversing. The rising interest rate cycle could now reverse the direction of fund flows globally.

    Also, the post pandemic recovery is well factored into earnings projections and market valuations.

    So from now on, I believe the earnings recovery could be disproportionately high only in rare economic circumstances.

Do remember that opportunity can be found in any adversity. Hence, you can gain from the current environment if you invest carefully.

Now if you do plan to invest, then aim at investing for a long term to reap maximum benefits.

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...

Equitymaster requests your view! Post a comment on "How 2021's Biggest Gainers have Fared in 2022 so Far...". Click here!

  

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