Goodwill Investor Education Initiative: GoodWill Eagle’s Eyes!
Can You believe it? –Post Covid ’19- 23 Stocks rallied upto 550 % growth since March 2020: Read the report:
No doubt Covid virus has devastated the markets with vengeance but Indian stocks have shown resilience and redeemed the lost ground in an incredible way!
Shares of 23 companies with healthy earnings outlook (at least for the short term) rallied up to 550 per cent from March lows. And June quarter earnings validated those bets, as these companies reported more than 20 per cent rise in both sales and profit in an otherwise washout quarter.
Many of the stocks that saw a stellar run in the rally have also turned out to be the ones delivering solid top line and bottom line growth through these hard times, and showing strong earnings visibility for the near future.
The best part is, investors sit easy in these stocks, as the rest of the market gets busy fixing stop losses and booking partial profits in anticipation of an imminent correction.
Shares of 23 companies have inter alia, proved that all is not bad as contemplated by the pessimists.The chart-topper was Aarti Drugs, whose shares rallied a whopping 548 % since March lows. For June quarter, the company reported a 280 per cent YoY surge in profit after tax (PAT) at Rs 85.45 crore on a 34.34 per cent rise in net sales at Rs 544.67 crore. While disruptions in China helped, the company is a prime candidate to benefit from the government’s push for indigenous API manufacturing.
Shares of LT Foods soared 288 per cent from March lows. The owner of Basmati rice brand Daawat delivered 82.24 per cent rise in net profit at Rs 83.58 crore on a 24 per cent rise in net sales at Rs 1,215 crore. Analysts believe may the company may outperform peers.
Sugar producer Dalmia Bharat Sugar & Industries more than doubled June quarter profit at Rs 125.86 crore on a 51 per cent rise in net sales at Rs 881.52 crore. This stock has risen 247 per cent from March lows. Optimum byproduct capacities helped Dalmia Bharat Sugar bring stability to earnings and cash flows. As likely additional sugar exports and higher sugarcane diversion towards heavy ethanol is expected to help it cut sugar inventory by 50,000 tons over next two years.
Laurus Labs’ June quarter bottom line was higher than the average annual profit it had reported over FY17-20. The June quarter numbers redefined earnings assessment for the company over near to medium term.
Brokerages now look at Laurus Labs as a solid play on the formulation business, and have revised earnings estimates sharply, suggesting a 20-30 per cent potential upside. This stock has rallied 245 % from March lows.
Among others, Vaibhav Global NSE 1.62 %, Granules India NSE -0.15 %, Triveni Engineering & Industries. Bombay Burmah Trading Corporation and Deepak Fertilisers have jumped 138-163 per cent from March lows. These companies reported at least 46 per cent rise in profit on 23-32 per cent rise in sales.
Tata Coffee, Muthoot Finance, Balrampur Chini Mills and ICICI Securities were among other stocks that have delivered over 100 % returns since March 24, the day BSE Sensex hit its 52-week low of 25,638. The BSE barometer is up over 50 per cent since then. These companies also reported stellar numbers for the June quarter.
Analysts say if an investor keeps on getting obsessed with the market level, s/he is never going to get it right. “You probably have missed out huge gains that you could have made in last three or four months. The lesson here is to focus on your companies: Be bottoms-up and focus on stocks, where you have the growth visibility. That is what we continue to do. It is true that a period of consolidation normally occurs after a runup. But this is a long-drawn thing,”
Other stocks that have seen 40-100 per cent recovery from March lows have all reported healthy quarterly numbers. Among them were stocks like Alembic Pharmaceuticals, PI Industries, Bayer CropScience, Manappuram Finance NSE -0.06 %, Divi’s Laboratories, Britannia Industries, Coromandel International NSE -0.08 %, Ipca Laboratories, Bajaj Finserv and REC.
Only companies with Rs 500 crore in quarterly sales and at least Rs 50 crore in profits were picked up for a study. So many more companies do exist.
Investors prefer companies with stable cash flow and stronger balance sheets where the debt is minimal. “Investors will do good to trace those investment ideas where balance sheets are stronger and can absorb shocks induced by black swan events like the current pandemic. Debt-free companies or at least those making attempts to reduce the overall debt by recasting their balance sheets will be better investment options for the cautious investor,” he said.
So investors need to stay in the market with an eagle-eye, pick up the right counter and get benefitted from the Equity markets as no other platform provides such amazing returns!
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