Stocks That Gained Over 20% since Cash Crunch
After 8.00 pm of November 8, the time of Prime Minister Narendra Modi’s demonetization announcement, there was no doubts that markets were going to take a beating. That came to pass, with some help from the shocking outcome of the US elections. The BSE S&P Sensex fell 5 percent the day after and Nifty declined over 6 percent.
Retail investors in the small and mid-cap space took a larger hit. Market analysts and economists have predicted a short and sharp correction both in the markets and the economy but are expecting demonetization benefits in the mid- to long term.
But some companies challenged the trend and posted handsome gains. Below is a collection of five such companies that have given more than 20 percent returns since demonetization was announced. Even as the gains in the stocks had nothing to do with demonetization, it is evidence to the fact that investors think the intrinsic positives overshadow any negative impact the cash ban may have.
Apparel and Textile:
- Swan Energy
- Swan Energy share price closed at Rs. 113 November 8 and on December 5 the stock was last traded at Rs 166.85, thus gaining almost 48% since demonetization. Swan Energy is the top 500 recommendation by Dynamic Levels for the quarter.
- Swan Energy (erstwhile Swan Mills) mainly earns its revenues from the textile business. The company recorded a profit of Rs 2.16 crore on a revenue of Rs 98.21crore as compared to a profit of Rs 0.58 crore for the entire FY16. The stock reacted optimistically to the Q2FY17 results which were declared on November 14.
- Though the textile division at present contributes a massively of the revenue, the company also has a real estate and an energy division. The energy division could see some importance as the company is developing India’s first Floating Storage and Re-gasification Unit (FSRU) at Jafrabad, Gujarat. Swan Energy’s annual report indicates that 100 percent of its capacity is booked on a long-term commitment basis from IOC, BPCL, ONGC and GSPC.
Steel and Lubricant
- Balmer Lawrie
- The Closing of Balmer Lawrie share price on November 8 stands at Rs 768.20 While on December 5th it was last traded at Rs 1045 thus gaining over 35%. It is the top 500 recommendation for the quarter made by Dynamic Levels as well.
- Balmer Lawrie stock witnessed investors interest after the company announced a 3:1 bonus on November 10. There is nothing remarkable in the company’s recent quarter performance. However, the company is sitting on Rs 457.5 crore cash on its balance sheet which is equivalent to nearly 16 percent of its current market capitalization.
- Adani Transmission
- Adani Transmission is the Multibagger stock as identified by Dynamic Levels. Adani Transmission share price, on November 8 had closed at Rs 46.15 and it was last traded at Rs. 56.10 on December 5th, gaining 22%.
- Adani Transmission has gained on back of the news that it has bought three transmission line assets from Reliance Infrastructure. This was the second achievement in recent times by the company after it acquired two transmission lines from GMR Energy. Adani Transmission, the chief private sector transmission company, has AAA rated clients and a 35-year annuity visibility. The only private sector company with a devoted transmission portfolio is attracting investors who look at long-term visibility.
- Welspun Corp
- Welspun Corp is another stock that gained over 20% in the Infra space and is a top 500 identified stock by Dynamic Levels for the quarter. On November 8th, Welspun Corp share price closed at Rs. 64.85 and on 5th December, it was last traded at Rs. 78.50 and has gained 21% since demonetization.
- Welspun Corp has been a gainer due to the changing fundamentals. The pipeline manufacturer moved up after touching its 52-week low at Rs 55.05 on 9thNovember 2016. Rising oil prices will do good to the company as investments in the sector had almost stopped over the years. Further, the stock also benefitted after Oil Minister Dharmendra Pradhan said that gas pipeline network in the country would be doubled over the next five years. The company also declared the appointment of a new Managing Director, Lalit Naik, who was earlier MD of Aditya Birla Nuvo’s chemical division.
- Balkrishna Industries
- Balkrishna industries share price closed at Rs. 1010 on November and on December 5th it was last traded at Rs. 1216.90, hereby gaining 20% since then. This is a top 500 recommendation by Dynamic Levels.
- Balkrishna Industries shot up on a strong performance for the September quarter. The company posted a profit of Rs 243 crore for the quarter as against Rs 106.2 crore in September 2015. Balkrishna Industries is among the large heavy vehicle tyre manufacturers worldwide. The company posted strong growth at a time when its global competitor Titan International posted a marginal drop.
- These five stocks from different sectors have posted the gain anywhere from 20% to 50% since the demonetization. These stocks have defied the theories of loss from cash crunch. One should keep an eye on these five beauties for the enrichment of their portfolio.