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Shares of nearly two-thirds of large-cap Indian companies fell in the last one year amid volatility in the market.
Sixty-four of the top 100 companies have fallen in the range of 1-87 percent since October 2017, according to Bloomberg data. That compares with a 1.5 percent gain in the NSE Nifty 50 Index during the period.
The market regulator classifies the first 100 companies according to market capitalisation as large caps. The top 100 firms had a market value ranging between Rs 27,000 crore and Rs 2.8 lakh crore a year ago, data compiled by Bloomberg showed. Of these, the biggest losers include Vakrangee Ltd., Tata Motors Ltd., Vodafone Idea Ltd., Hindustan Petroleum Corporation Ltd. and Bharat Electronics Ltd.
Concerns over an escalating trade war, rising crude oil prices and a depreciating rupee led to a 3.3 percent decline in the broader Nifty 500 Index. Also, a change in mutual fund investment classification and the recent liquidity concerns around non-bank lenders after defaults at IL&FS Ltd. contributed to the selloff.
Here’s a look into the large-cap stocks that failed to live up to investors’ expectations. These are tracked by at least 10 analysts and more than 70 percent of them have a ‘Buy’ rating.
The top five stocks that fell the most in the last one year are L&T Finance Holdings Ltd., Yes Bank Ltd., Vedanta Ltd., InterGlobe Aviation Ltd. and Sun TV Network Ltd. Here's why:
Domestic brokerages were mainly bullish on the company because of its robust fee income, focus on profitable segments and consistent improvement in profitability. Provisions related to infrastructure loan book, however, impacted L&T Finance’s profitability. Also, the recent liquidity concerns around non-bank lenders and the company’s exposure into default-rated property developer SuperTech Ltd. have sent its shares down
Analysts were bullish on the private lender due to its high loan growth and improving current account-savings account ratio—indicating better efficiency. The shares took a hit after the Reserve Bank of India asked Yes Bank’s chief executive and managing director Rana Kapoor to step down after a term extension up to Jan. 31, 2019. Kapoor’s leadership came into question after the RBI pointed out discrepancies in the way Yes Bank reported its bad loan numbers.
An attractive commodity exposure, a strong volume growth and higher dividend yield had impressed analysts tracking the stock a year ago. But a correction in global commodity prices of aluminium and zinc—which contribute nearly two-thirds of its segment profit—impacted the shares. Vedanta, one of the largest diversified miners globally, was also hurt by the shutdown of its copper smelting plant at Tuticorin.
Analysts were bullish on India’s most profitable low-cost carrier on account of its increasing passenger growth in the world’s fastest growing aviation market. But a higher crude, weaker rupee and price war among peers impacted IndiGo’s performance. Also, engine issues related to A320neo and exit of top officials led to the decline in share prices.
Digitisation in Tamil Nadu, turnaround in its Indian Premier League franchise and an expected increase in advertising revenue had kept analysts upbeat on Sun TV a year ago. But intense competition in core markets that restricted advertisement growth and a fall in viewership amid a dispute with Arasu Cable TV Corporation hurt investor sentiment.
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