Sensex atop 60K, but over 240 stocks still up to 68% away from 52-week highs

New Delhi: Despite a sharp sell-off, domestic equity markets were able to script a quick recovery and settle above key psychological levels. BSE Sensex was able to hold above 60,000 mark, whereas Nifty50 managed to close over 18,000.

Benchmark equity indices - Sensex and Nifty50 - have zoomed as much as 21 per cent from their 52-week lows, but about every second stock on the BSE500 index is in bear grip, falling up to 68 per cent from their recent highs.

“We are on the cusp of a manufacturing renaissance, a capex revival and credit growth and real estate cycle in India,” says Ravi Dharamshi, Founder and MD, ValueQuest Investment Advisors in an interview with ET now.

He said that India is anti-fragile and there are good reasons why it is showing this kind of outperformance. The smile is more that India will do well in this world where there is all kind of uncertainty around.

According to the data from Ace Equity, as many as 240 stocks or 48 per cent shares of the index are down more than 20 per cent from the 52-week highs. BSE500 index constitutes about 95 per cent market cap of all BSE-listed companies.

A stock or index is said to be in the bear, when it has dropped 20 per cent or more from its recent peak, which is usually 52-week highs, then it is considered to be in the bear grip.

Out of these 240-odd counters, 18 stocks have plunged 50 per cent or more from their latest highs, whereas 100 others are down by one-third from their recent peak.

Domestic equity markets have remained volatile for the last few weeks on the back of various domestic and global factors including rising inflation, crude oil prices, weakness in rupee, rate hike weakes and economic slowdown.

If one looks at valuations, with 18 times FY24, we are probably more reasonably priced than where we were in October of 2021, when the correction started, says S Krishnakumar, Director, Lion Hill Capital.

"We have consolidated and are in a better position today. The other economies in Asia and other emerging markets have had a significant downturn and earnings downgrades," he added.

The list is topped by Dilip Buildcon, which has dropped 68 per cent from its 52-week high of Rs 749.30 on October 13, 2021. The scrip settled at Rs 240.50 on Wednesday.

It is followed by Brightcom Group. The digital media and software player has dropped to Rs 40.8 at its previous close, dropping as much as 67 per cent from its 52-week high of Rs 122.88 hit on December 22, 2021.

New age internet firms - One97 Communications (Paytm), Zomato and PB Fintech (PolicyBazaar) - all are trading 63 per cent below their respective 52-week highs. The trio witnessed their record peak in November 2021, before the tech rout.


Tanla Platforms (down 61 per cent), Zensar Technologies (down 61 per cent), Lux Industries (down 60 per cent), Metropolis Healthcare (down 59 per cent), Tata Teleservices (down 58 per cent) and Indiabulls Real Estate (down 57 per cent) also make to the list in top names.

Among other counters, HEG, Manappuram Finance, Indiamart Intermesh, Indiabulls Housing Finance, Welspun India, Vaibhav Global and TV18 Broadcast are also down between 50-55 per cent from their latest peaks.

Majority of the companies in bear grip include names from IT, technology, pharmaceuticals, metals, financial services and manufacturing sectors, which have remained underperformers in the last few months.

Bluechip counters including Wipro, Tech Mahindra, Nalco, SAIL, Lupin, Divi's Laboratories, HCL Tech, Vedanta, Life Insurance Corporation of India, NMDC, Tata Steel, Infosys, TCS and GAIL (India) are also in the beak grip, among others.

We are not really buying anything fresh. In terms of what we hold, I have already said that we have exposure in pharma and defence. There is no exposure to banking also and at these levels we are not really looking at entering anything, says Rohit Srivastava, Founder, Indiacharts.com.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)