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Authors: JordanStocks that have consistently compounded investor wealth on Dalal Street for last five years are going through a rough patch this year.
As many as 11 out of 12 companies that rallied over 20 per cent every year since 2013 have tumbled up to 77 per cent this calendar year till May 2.
Data available with corporate database Capitaline showed pharma company Caplin Point Lab, which rallied over 4,000 per cent in last five years, is down 4 per cent year-to-date.
In last five years, the stock had delivered a maximum of 354 per cent return in 2014 and a minimum of 22 per cent in 2016.
The company’s profit has grown at over 64 per cent annually (CAGR) over the past five years.
Kiri Industries, manufacturer and exporter of a wide range of dyes, has seen its stock slip 18 per cent to Rs 414.30 as of May 2 from Rs 503 on December 29 last year.
That broke a stellar run: the stock had jumped 76 per cent 2017, 172 per cent in 2016, 46 per cent in 2015, 26 per cent in 2014 and 356 per cent in 2013.
Shares of KRBL, producer and exporter of India Gate brand basmati rice, are down over 25 per cent this calendar after rising over 2,000 per cent in last five years.
The scrip had given a minimum annual return of 28 per cent and a maximum of 207 per cent between 2013 and 2017.
Value investor Anil Kumar Goel holds over 3 per cent stake in KRBL as per the latest shareholding data available with BSE.
Chemicals firms Bodal Chemicals and Alufluoride, which climbed over 20 per cent every year over the past five years, are down 15 per cent and 77 per cent, respectively, this calendar.
ICICIdirect.com has a ‘buy’ rating on Bodal Chemicals with an 18-month target price of Rs 150.
“An environmental clampdown in China due to excessive production and non-adherence to pollution control norms had led to supply disruptions and shortage of essential industrial chemicals.
This is an opportunity playing out in the chemicals space in India and it looks more structural in nature, thereby developing as a sustainable moat, going forward,” ICICIdirect.com said in a report.
India Ratings and Research last month assigned Bodal Chemicals (BCL) a Long-Term Issuer Rating of ‘IND A+’ with stable outlook, reflecting its strong financial clout.
But often a sound management and good financials are not enough to hold up a stock when things turn unfavourable on the business front.
Vakrangee shares have tumbled 77 per cent this calendar after a trailblazer run that saw the stock rise 208 per cent in 2017, 57 per cent in 2016, 40 per cent in 2015, 49 per cent in 2014 and 40 per cent in 2013.
Vakrangee came under pressure after market regulator Sebi launched a probe into alleged price and volume manipulation in its own scrip on BSE and NSE.
There are also other multibaggers such as Hatsun Agro Products, ASI Industries, Himatsingka Seide, Technocraft Industries (India) and Essel Propack, whose shares have plunged between 4 per cent and 25 per cent so far this year.
These stocks had delivered over 20 per cent return every year since 2013.
Edelweiss Securities recently recommended a ‘buy’ rating on Essel Propack, but revised the target price downward to Rs 314 (from Rs 317 earlier).
Trigyn Technologies is the only performer on the list, rising over 10 per cent this calendar after a dream run that lifted the stock 1,153 per cent in last five years.
Since 2013, the stock has risen between 23 per cent and 124 per cent on any given year.
Avanti Feeds, a leading manufacturer of high quality shrimps feed and processor and exporter of shrimps, was the top wealth creators in last five years, having rallied over 7,750 per cent.
The stock jumped 416 per cent in 2017, 11.50 per cent in 2016, 39.10 per cent in 2015, 536.80 per cent in 2014 and 54.20 per cent in 2013.
But the shares are down nearly 5 per cent so far this year till May 2.
Edelweiss recently initiated coverage on Avanti with a ‘buy’ rating and has a price target of Rs 3,306.
“We estimate Avanti to grow PAT at a CAGR of 26 per cent over FY18-20 with healthy RoCE of 56 per cent,” the brokerage said in a research note.
Disclaimer: Stocks mentioned are for information purpose only.
Consult your financial adviser before taking any buy/sell call.
