NEW DELHI: Who would have guessed this day 10 years back, when the dotcom mania was in full swing, that a builder of apartments from New Delhi
The top-10 gainers of the BSE 500 index this decade come from a wide range of sectors such as oil, real estate, mining, textile, steel, coal, finance and construction, even as the then fancied technology, pharma and fast-moving consumer goods (FMCG) fell by way side when the dotcom bubble burst, a SundayET analysis shows. The index represents 20 main industries and accounts for almost 93% of the total market capitalisation.
“It shows that our economy over the last decade has become more inclusive and growth has indeed percolated to a larger bouquet of industries,” says ICICI Securities executive director Anup Bagchi.
“Proactive government policies have in particular opened up sectors easing funding regulations for capital expenditure.” Unitech, which was trading at about 34 paise, adjusted for splits and bonuses, in 2000, emerged at the top. Its shares ended at Rs 82 Thursday, which is nearly 240 times the price it was in the beginning of the decade, according to data from Centre for Monitoring Indian Economy (CMIE).
A Rs 100 investment in it then translates into Rs 24,000. But that is statistic. Of course, the shares are down from their peak of Rs 538.25 in January 2008.
Then there are five companies, which currently trade at over 100 times their stock price in early 2000. Oil drilling firm Aban Offshore (166 times), construction company Era Infra Engineering (152 times), India’s largest iron ore exporter Sesa Goa (134 times), coal producer Gujarat NRE Coke (106 times) and ferro alloys manufacturer Nava Bharat Ventures (103 times).
The performance shows that what may be a fad at one time, may fade and that a focused sectoral investment could adversely affect the returns. “It highlights stocks with rich valuations. One will be better off to invest in stocks which offer decent prospects and are undervalued though they may not necessarily be in favour right now,” says Shrikant Shetty, head of equity advisory at Delhi-based Unicon Securities.
The other top performers are garment manufacturer Phoenix Mills (98 times), Mumbai-based diversified firm Jai Corp (95 times), equipment manufacturer Nesco (92 times), and truck financier Shriram Transport Finance Company (66 times). As a sector, it was technology with them being half of the 10 big losers, the study shows. Aftek, NIIT, Hexaware Technologies, Polaris Software Lab and Mastek, topped the list of laggards.
“The financial performance of this sector was decent during the current decade. It was the expectations of obscene growth rates which has had made valuations dropping,” says Shetty.
Novartis India, Cals Refineries, BSEL Infrastructure Realty and Himachal Futuristic Communications lost more than 70% of their valuations during the period, the study shows. But technology as a sector may not be a bad investment proposition given that their valuations have fallen substantially from their peaks.
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more @ http://economictimes.indiatimes.com/quickiearticleshow/5360536.cms
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TECHNICAL ANALYSIS: Index Outlook: 2009 bows out in style
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STOCKS: Jaiprakash Power Ventures (formerly Jaiprakash Hydro Power): Hold
Investors with high-risk appetite and long-term investment horizon should hold on to the Jaiprakash Power Ventures (JPVL, until recently named Jaiprakash Hydro ...
Investors can retain their share holdings in Firstsource Solutions, a BPO player, considering the company's healthy vertical and geographic mix, the revival in the deal momentum and benefits that accrue from macro trends such as ...
DERIVATIVES MARKETS: Stock Strategy: Go long on NTPC Jan futures
NTPC (232): NTPC was on a roll last week. After moving in a narrow band for quite some time, the stock vigorously pierced the resistance level at 215 and entered the bull zone. It now appears that the stock is heading for its next ...
TECHNICAL ANALYSIS: Query Corner: Jai Corp continues in a long-term down trend
I am holding Educomp Solutions and Satyam Computer purchased at higher levels. Please let me know the short and long-term prospects for these stocks. ...
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Src: Economictimes, DP Blog, Businessline, SM Blog and etc
