Dec 2, 2003|
Beating the Sensex
Indian stock markets have witnessed strong gains in recent times with the BSE-Sensex rising by as much as 58% in the past one year. However, there have been companies whose share prices have appreciated to such an extent that they have beaten the index returns by a good margin and have given extremely high returns to investors. In this article we list the top ten companies, which have gained the highest during the last one-year and try to look into the (fundamental) reasons (if any) behind such optimism.
Top 10 gainers...
As is evident from the above table, the list is a fair mix of both, the new economy sector companies such as HCL Infosys and Moser-Baer as well as the old economy brick and mortar companies such as Steel Authority Of India (SAIL) and Sterlite.
The top gainer from the list includes the domestic copper giant, Sterlite, whose shares have appreciated almost 10-fold in the last 12 months! While there is optimism towards the stock on account of copper prices trading at highs not seen in recent times and group holding company, Vedanta Resources, scheduled to get a listing on the London Stock Exchange, the surge of the order of almost 1,000% needs a lot more justification than that.
As far as the other metal companies (in the table above) are concerned, the improvement in the metals cycle led by the insatiable appetite of China for metals such as steel and iron ore to feed its infrastructural revolution, has led to impressive growth in revenues for companies such as SAIL (India's largest steel company) and Sesa Goa (India's largest private sector exporter of iron ore). As a result, their stocks have appreciated by a huge 389% and 521% respectively. Moreover, these companies are also being helped by strong internal demand in view of the infrastructure development activities being undertaken in the country.
Among the new economy sector stocks, while HCL Infosys has risen 280%, Moser Baer, which is among the world's largest producer of optical data storage products (floppy disks, recordable compact disks etc) has also seen its market-cap shoot up by 256%. It must be noted here that in the past five years, Moser Baer's net profits have grown at a CAGR of 86% despite facing intense competition in the global markets.
Prominent among the other gainers are companies like GE Shipping, Lupin and Oriental Bank. While GE Shipping has benefited from the increased exports of steel and iron ore to China, which has led to a significant increase in freight rates, Oriental Bank's strong balance sheet and good quality of assets have resulted in investors making a beeline for the stock. In case of Mahindra & Mahindra (M&M), the market leader in the tractor and utility vehicles (UV) segments, benefits of higher capacity utilisation and better sales mix, which is also reflected in the improved operating margins, has helped the M&M stock find a place in the top 10 gainers of the year.
While it is true that most of these stocks were undervalued and languishing at lower levels a year ago and had every reason to experience an uptrend on account of good growth numbers, we are of the view that the investors, from hereon, should take a realistic view of the growth prospects of these companies and then arrive at a price rather than getting caught in the bull market frenzy.
More Views on News
Jun 10, 2017
Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.
Aug 19, 2017
Ever heard of Lindy Effect? Find out how you can use it to pick timeless stocks.
Aug 18, 2017
Buying the index now will hardly help make money in stocks even in ten years.
Aug 18, 2017
Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.
Aug 17, 2017
PersonalFN simplifies the mutual fund account statement for you.
More Views on News
Aug 7, 2017
The data tells us quite a different story from the one the government is trying to project.
Aug 10, 2017
Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 7, 2017
Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407