Investors look for consistent performers that can survive multiple market cycles.
Data throws up names of 11 BSE stocks from large, mid, and smallcap space that has given more than 10 percent returns each consistently in the June quarters of the last 4 years.
Indian markets plunged by about 30 percent in the March quarter pushing Sensex and Nifty into bearish phase amid the outbreak of coronavirus. This led to persistent selling by foreign investors.
Since the start of the June quarter of financial year 2021, markets have stabalised a bit. Sensex is up 10 percent so far in the June quarter.
Data collated from AceEquity for the past 4 years for the June quarter showed that there are 11 stocks that have consistently given strong returns of over 10 percent each.
These include Welspun Enterprises, Bajaj Finance, Kotak Mahindra Bank, GMM Pfaudler, Punjab Alkalies, and KG Petrochem Ltd.
“Among the above names, Kotak Mahindra and Bajaj Finance have been reporting strong financial performance consistently so we’re not surprised with the trend in these two. However, it could be multiple factors viz. expectation of higher earnings, buoyancy in the overall market etc. in case of the other stocks,” Ajit Mishra, VP Research, Religare Broking told Moneycontrol.
Barring a few, most of the companies belong to the small & midcap segment of the market which was brutally hammered in the March quarter and is still showing no signs of recovery so far in the June quarter.
Note: the above table is for reference and not recommendations from analysts
Now the question is can they repeat their performance in this June quarter as well? Well, experts feel that with the current situation of lockdown, it is unlikely that we will see a repeat.
“The chances of a repeat seem dim at present and if it does, it indeed could be very surprising, given the extent of damage that COVID-19 has caused to the economy at large. The negative impact is being seen across most sectors as production along with consumption, has been hit very hard,” Aamar Deo Singh, Head – Advisory, Angel Broking Ltd told Moneycontrol.
“The severity of the crisis can be gauged by the fact that the demand for petrol & diesel is down more than 60% across the country. Everything has come to a standstill, but now with the government, announcing relaxations in a phased manner, things might limp back to normal, but that would take many months,” he said.
June quarter will be tough for Indian markets although the government unleashed a Rs 20 lakh cr stimulus package to cushion the economic impact of the lockdown and restart economic activity.
Not all stocks are looking weak, hence, a pickup in economic activity would fuel the demand, suggest experts.
“Companies like Kotak Mahindra, Bajaj Finance, Astral Poly, Welspun Enterprises, etc has been performing better than its peers from the last few years. Many of these companies have become numero uno in their respective sectors and was there-fore commanding premium valuations compared to its peers. June 2020 is going to be a tough quarter for all companies,” Atish Matlawala, Sr Analyst, SSJ Finance & Securities told Moneycontrol.
“Of all the companies mentioned in the list, we remain positive on Vinati organics and Astral poly. Apart from the companies mentioned in the list, we are also quite optimistic on Aurobindo Pharma, Atul Ltd and Page industries,” he said.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.