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Last Updated : Jan 21, 2020 02:54 PM IST | Source: Moneycontrol.com

Corporate tax cut cheer: 40 NSE stocks gain 30-108% since Sept 2019

These stocks had fallen more than 50 percent during the Jan, 2018-September 2019 period.

Sunil Shankar Matkar
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The government's step to cut corporate tax rate in September 2019 rejoiced the market which was reeling under selling pressure till then.

Factors such as IL&FS-led NBFC crisis, rising NPA worries, economic slowdown, US-China trade concerns and high valuations had ruined the sentiment (since January 2018).

Nifty50 fell 0.34 percent, while Nifty Midcap index plunged 29 percent and Smallcap cracked 43 percent during the January 2018 to September 19, 2019 period.


On the other hand, Nifty50 gained 14 percent, Nifty Midcap gained 16.5 percent and Nifty Smallcap 100 was up 15 percent during the September 19, 2019-January, 20, 2020 period.

Favourable global cues (signing of US-China phase one trade deal, and strong hope of Brexit deal by January 31, 2020) and FIIs inflows also helped the small and midcap stocks recover.

Despite the up move, the broader indices are far from their record highs.

The Nifty Midcap 100 is 21.5 percent and Smallcap 100 index 54.6 percent away from their record high levels (21,840.85 and 9,656.55).

On studying the data, Moneycontrol concluded that 40 NSE stocks that have market capitalisation of more than Rs 1,000 crore rallied 40-108 percent during the September 19, 2019-January 20, 2020 period.

These stocks had fallen more than 50 percent during the January 15, 2018-September 19, 2019 period.

The names include BF Utilities, Avanti Feeds, Shipping Corporation, JSPL, Indiabulls Real Estate, Tata Motors, Corporation Bank, Ashok Leyland, IRB Infrastructure and Tata Steel.


Note: The list of stocks is not for investment advice, it is a reference list.

Outlook 2020

Going forward, experts feel that once the economic and earnings recovery starts reflecting, midcap and smallcap indices will gain further.

"We firmly believe that there is much more to come in midcaps and smallcaps this year. The correction in this space started from 2018 and has lasted for almost 1 and a half year. The rationale remains, first the valuations have reached to comfortable level, however, with the recent sharp rally seen already in last two months they are not as cheap as they were, but still look attractive," Himanshu Gupta, VP Research at Globe Capital Markets told Moneycontrol.

"This year (2020) is going to be a very rewarding year for bottom up investors, however the word of caution remains that one should be sticking to liquid and high quality names," he added.

Meanwhile, analysts and experts are of the view that the government may announce policies that will further boost the economy and consumption. This will in turn help the market scale higher.

"Budget this year will be one of the most critical ones in many years. Its objective will be to drive up consumption and investment spending. We expect the Budget to have large-scale measures on both the fronts," said Raghvendra Nath, Managing Director at Ladderup Wealth Management.
First Published on Jan 21, 2020 02:39 pm