INSUBCONTINENT EXCLUSIVE:
Select beaten-down smallcaps as well as microcaps delivered mindboggling returns on Dalal Street over the past three months as the market
began to look up after a painful slump that haunted stocks since January 2018.
Data available with Ace Equity showed select companies from
deliver stellar returns.
Topping the list was the Anil Ambani group entity Reliance Naval and Engineering, which surged 995 per cent from
its 52-week low Rs 0.70 on September 11 to trade at Rs 7.67 on November 26.
His other listed entities, including Reliance Power (up 100 per
cent) and Reliance Infra (up 60 per cent), also delivered decent returns after hitting 52-week lows in the recent past.
The rally in Adag
For Adag Companies, some investors are trying to find valuation gap between the enterprise value and asset value," says G Chokkalingam,
founder of Equinomics Research and Advisory.
The list also included other penny stocks such as Vodafone Idea (up 162 per cent), Manpasand
Beverages (up 137 per cent), Kwality (up 108 per cent) and Adlabs Entertainment (up 100 per cent), which multiplied wealth in the last three
months.
Of late, Vodafone Idea has gained momentum on hopes of a relief package from the government on AGR dues and a tariff hike by peer
Similar momentum was also seen in the other major telecom player, Bharti Airtel
However, both have corrected since, as hopes of a relief package from the Centre evaporated.
Stocks like Reliance Naval, Vodafone Idea,
Indiabulls Ventures, Edelweiss, Dolat Investments, Coffee Day Enterprises and Indiabulls Real Estate have rallied 80-120 per cent since
September 1 after hitting their 52-week lows.
Will this rally sustain? Is there more steam left in them beyond this early surge?
"One should
not see how much a penny stock has risen
What needs to be seen is how much the stock had fallen prior to the surge
Such stocks are left with minimal of their peak values
All the companies are alive, but some of them are facing severe pain," says Vijay Kedia, a value investor.
Among others, Zee Media, Ferro
Alloy Corp, Orient Green Power, DB Realty, Uttam Galva Steels, IL-FS transportation, Dish TV, LKP Securities and Punj Lloyd have delivered
over 50 per cent return in three months.
Many of these companies are still struggling to get out of the financial stress they had landed in
because of over-leveraging, corporate governance issues and prolonged slump in specific sectors.
One should not completely write off a
company, which is alive, Kedia insists
"Marta hua aadmi bhi apni body donate karta hai
Uske aankh, gurde ki kimat hoti hai
(Even a dying person donates his body
All the information provided in this article is only for information purpose.)