After touching an all-time excessive of 61,200 in January 2022, the BSE Sensex swung like a pendulum.
The index tumbled to 52,800 in March 2022 after which shot as much as 60,000 in April 2022, solely to fall again to 52,100 in June 2022.
This curler coaster trip has been a perform of weak market sentiments.
Overseas institutional traders (FIIs) have been web sellers led by geopolitical tensions, excessive price of inflation, rate of interest hikes, and the inherent danger of sluggish progress.
The recent stock market sell-off has not spared anybody.
Most shares have fallen, with some even nearing their 52-week lows. Nonetheless, a handful of shares are buying and selling at their 52-week highs. What’s the secret behind their positive factors?
Let’s discover out.
#1 Mahindra & Mahindra
Prime of the checklist is car large, Mahindra & Mahindra (M&M).
After taking pictures up by 25% previously 12 months, the inventory is a mere 6% away from its 52-week excessive of ₹1,025.
This leap comes on the again of sturdy product launches and better margins expectations.
The corporate is the world’s largest producer of tractors and enjoys a powerful presence within the utility and low industrial automobile phase within the nation.
It’s a dominant participant within the Indian tractor phase with a 41% market share.
Nonetheless, their market share within the utility automobile phase has been declining, led by an onslaught of a number of gamers.
Aside from cars, Mahindra & Mahindra is current throughout a big selection of sectors.
From IT to actual property, it runs companies in eleven totally different sectors through varied listed and unlisted entities.
Within the final 5 years, the corporate’s income has grown at a CAGR of two.4% whereas web revenue has grown at a CAGR of 4.2%. The corporate’s 5-Yr ROE common stands tall at 18.3%.
To know extra, take a look at the monetary factsheet and the most recent quarterly outcomes of Mahindra & Mahindra.
#2 Hindustan Aeronautics
Subsequent on our checklist is Hindustan Aeronautics.
The inventory has surged by 80% previously 12 months, bucking the inventory market’s downward development. It’s now buying and selling now virtually close to its 52-week excessive of ₹1,940.
Hindustan Aeronautics designs, develops and manufactures aeronautic merchandise, comprising plane, helicopters, aero-engines and so forth.
Within the monetary 12 months 2022, the corporate received its first gentle fight helicopter order after bagging a fighter plane order in 2021.
The order in 2021 was the nation’s largest Make in India order (US$ 5.6 bn). Not solely did it widen the order pipeline, but it surely additionally reversed the corporate’s declining backlog.
Aside from this, the corporate’s outcomes for the monetary 12 months 2022 have been sturdy. Its web revenue grew 17% YoY, led by a steadiness sheet transformation to web money.
Furthermore, a powerful order e book and a extremely anticipated authorities stake sale have piqued investor curiosity, sending the inventory worth via the roof.
The corporate’s income and income have grown at a 5-Yr CAGR of 4.3% and 10.2% respectively, whereas the 5-Yr ROE common stands tall at 21.3%.
Rewarding its shareholders effectively, the corporate follows a really liberal dividend coverage. The dividend yield previously 5 years has been averaged round 3.2%, a lot above the trade common of 1.1%.
To know extra, take a look at the monetary factsheet and the most recent quarterly outcomes of Hindustan Aeronautics.
#3 Varun Drinks
Third on our checklist is the soft-drink large Varun Drinks.
The inventory is now touching a 52-week excessive of ₹794. It has delivered a 47.7% return for its traders previously 12 months.
This sharp motion within the inventory worth was a perform of market share positive factors and an enchancment in its quarterly outcomes.
The overall income grew by 64% in comparison with the earlier quarter resulting from strong demand, increased realisations and the early onset of summer time in India. The web revenue went up by 6 occasions in the identical interval.
Varun Drinks manufactures, sells and distributes comfortable drink merchandise underneath emblems and types owned by PepsiCo. These embody each carbonated and non-carbonated drinks.
The corporate works on a franchisee foundation with a license to perform in 17 states and a couple of union territories in India along with sure worldwide markets.
The comfortable drink market is aggressive in India, with Coca-Cola garnering a 35% share, PepsiCo’s 21% share, and Parle’s 11% share by quantity.
The corporate has loved a stellar run over the past 5 years. Its income and revenue has shot up by a 5-Yr CAGR of 17.4% and 74.8% respectively.
The corporate’s web debt to fairness ratio has fallen precipitously from 1.5x to 0.8x previously 5 years and present curiosity protection ratio stands at 3.2x.
Rewarding its shareholders effectively, the 5-year common return on fairness stands at 15.1%.
To know extra, take a look at the monetary factsheet and the most recent quarterly outcomes of Varun Drinks.
#4 Elgi Gear
Fourth on our checklist is the compressor producer, Elgi Gear.
A high performer, the inventory jumped up by a whopping 91% previously 12 months.
Nonetheless, the development hasn’t been linear because the inventory worth has been fairly unstable because the starting of the 12 months. It went as much as ₹409 in Feb 2022 solely to fall again to ₹257 in Could 2022.
The inventory is now buying and selling at near its 52-week excessive of ₹422.
These swings are attributable to the sturdy numbers reported by the corporate within the March 2022 quarter.
For the monetary 12 months 2022, the corporate clocked a web revenue of ₹1.8 bn, up 80% in comparison with its income in 2021.
The overall income grew by 40% throughout the identical interval.
Furthermore, the corporate is tackling the weak demand and margins situation amidst an inflationary atmosphere, conflict, and political unrest in some geographies.
Elgi Gear designs and manufactures an in depth vary of air compressors.
With over 60 years of expertise, the corporate is a world chief in air compressors catering to all kinds of sectors in over 120 nations. Exports account for over 50% of its complete revenues.
The enterprise has been rising effectively, registering income and web income 5-Yr CAGR of 6.7% and 15.5% respectively.
The returns have been equally sturdy. The enterprise generated a 5-Yr common Return on Fairness (ROE) of 12.8% and the 5-year common dividend yield stands at 0.7%.
To know extra, take a look at the monetary factsheet and the most recent quarterly outcomes of Elgi Gear.
#5 Maharashtra Seamless
Final on our checklist is the pipe producer, Maharashtra Seamless.
After doubling previously 12 months, it’s at present buying and selling close to its 52-week excessive of ₹619.
Nearly all of the positive factors got here in September 2021, when the inventory shot up by a whopping 60% in simply 15 days.
This parabolic transfer is attributable to the sturdy progress in enterprise disclosed by the corporate within the quarterly outcomes.
Aside from the outcomes, the corporate additionally scored an enormous order from the oil and fuel main, ONGC sending its inventory worth hovering.
The corporate manufactures an in depth vary of seamless pipes, primarily utilized in oil exploration boilers and pipelines.
The enterprise has been doing phenomenally effectively.
On a CAGR foundation for 5 years, it has generated income and web revenue progress of 16.6% and 79.4% respectively.
Nonetheless, the five-year common return on fairness stands at 5.4%. The corporate has been rewarding its shareholders effectively, producing a median 1.3% dividend yield previously 5 years.
To know extra, take a look at the monetary factsheet and the most recent quarterly outcomes of Maharashtra Seamless.
Snapshot of ESG shares from Equitymaster’s inventory screener
This is a fast view on the above-mentioned corporations primarily based on some essential monetary parameters.
In conclusion
A inventory buying and selling at its 52-week excessive or low alone doesn’t assure sturdy returns or vice versa.
Subsequently, accumulating shares simply because they’re rising or falling in worth with out a strong rationale might be harmful.
There are a number of cases the place shares buying and selling at their all-time highs have carried out exceedingly effectively, multiplying in worth and vice versa.
So, if you wish to make investments, a better approach is to dig deeper. Do your analysis.
Verify to see if there are any long-term triggers to progress. Examine and analyse the company’s fundamentals and all the time search for a margin of security earlier than investing.
Blissful Investing!
Disclaimer: This text is for info functions solely. It isn’t a inventory advice and shouldn’t be handled as such.
This text is syndicated from Equitymaster.com
Supply: Live Mint