Another Samvat fades into history, and in the final analysis, it did not turn out to be as terrible as what most investors had dreaded. Cement, pharma and FMCG were the clear winners, while oil & gas and telecom were the undisputed laggards. Here’s a quick look at the major movers in every sector.
Banks Karnataka Bank (67%) Jammu & Kashmir Bank (70%) Barring a couple of exceptions, investors showed a marked preference for private banks this Samvat. Not surprising, considering that state-owned banks bore the brunt of deteriorating assets because of their higher exposure to infrastructure projects. Stocks like Bank of India, Punjab National Bank and Central Bank declined 11-26%.
IT Tech Mahindra (66%) Financial Technologies (66%) Unlike on previous occasions, a weak rupee did not help companies across the board. Company specific issues dragged Infosys (-17%) and Wipro (0.1%) to the bottom of the heap, while HCL Technologies (+44%) improved its standing with investors, through consistent performance.
Capital Goods Thermax (31%) AIA Engineering (22%) It was a difficult Samvat for capital goods companies in general, but the margin of underperformance reduced significantly in the closing months as the government reaffirmed its commitment to infrastructure spending. BHEL (-27%) and BEML(-44%) finished at the bottom, but L&T(19%) rallied despite most analysts assigning a sell rating to the stock, citing expensive valuations
FMCG HUL (55%) Godrej Consumer Products (62%) Investors flocked to FMCG shares, hoping to ride out the uncertainty in the broader market. That triggered a self-fulfilling prophecy whereby rising stock prices in turn attracted more buyers. While many analysts decried the expensive valuations, growth numbers did not disappoint by much even if they did not fully justify the prices.
Realty Anant Raj (88%) Prestige Estate Projects (71%) On the whole, it was a bleak year for the realty sector, as a combination of high interest rates and exorbitant property prices kept buyers away. A handful of stocks did manage to do well Allegations of poor corporate governance by Canada-based research house Veritas contributed to the underperformance of DLF (-10%) and Indiabulls Real Estate (-3%)
Auto Tata Motors (46%) Maruti Suzuki (26%) Thanks to the strong performance of its international division, Tata Motors was a clear outperformer in the sector. Maruti managed to make a good comeback, considering the labour problems it had to grapple with during the year. Investor apathy for two-wheeler shares pushed Hero MotoCorp (-11%) to the bottom of the rankings.
Pharma Wockhardt (277%) Wockhardt was undisputedly the star performer in the sector, which like FMCG, was a major beneficiary of the flight to defensive sectors. But the list of gainers was dominated by mid-cap stocks, which gave eye-popping returns to investors, far in excess of those offered by frontline shares like Sun Pharma (+38%), Cipla (32%), Ranbaxy (3%) and Dr Reddy’s Laboratories(+12%). And yet, there were a good number of losers too on that list, Orchid (-41%) being the notable one.
Oil & gas Cairn India (11%) Reliance Industries (-10%) It was a dismal year for the sector in general, with the exception of Cairn India, which eked out small gains. Falling gas output at the KG-D6 plant, and its run-ins with the petroleum ministry marred sentiment for Reliance Industries. Shares of state-owned oil marketing companies declined on mounting under-recoveries, with the government yet to take any firm decision to address the subsidy issue.
Telecom Bharti Airtel (-30) Reliance Communications (-25%) Easily the worst performing sector of the sector. Unfavourable regulations were the single biggest factor weighing on the performance of the stocks. The new rules on spectrum allotment will add to the debt burden of the companies, which are already grappling with a shrinking bottomline because of fierce competition.
Cement JK Lakshmi Cement: (221%) JK Cement Ltd: (204%) It was the unglamorous cement sector which provided the most consistent returns for investors, with second liners stealing the show. Allegations of cartelization against the larger players did not dampen sentiment beyond a point, with stocks like ACC (+21%), Ambuja Cement (+37%) and Ultratech (+79%) notching up decent gains. India Cements, however was a notable laggard.