The Hindu Business Line : Info tech, pharma stocks survive this bear scar

BL Research Bureau Monday’s fall has dragged the CNX Nifty back to its mid-March levels (4533 points). But is the value of your portfolio also back to its March levels? That would depend entirely on the sectors and stocks you favoured over these three months.

There has been a huge divergence in the way different sectors have handled this roller-coaster market. If you picked IT, pharma or FMCG stocks in mid-March, you could be sitting on respectable gains of anywhere between 20 and 50 per cent over these three months.

On the other hand, if real estate, banking, cement or media were your choices, a sizeable chunk of anywhere between 20-50 per cent could have been shaved off your portfolio value!

While the CNX Nifty is flat on a point-to-point basis, the CNX IT index is up 26 per cent from its March 18 level. While software biggies such as Infosys (up 27 per cent from mid-March) and Wipro (up 36 per cent) have posted solid gains, mid-sized IT firms such as Patni Computer (up 32 per cent) and Tech Mahindra (28 per cent) have also not been far behind.

Pharma stocks also figure prominently in the gainers list, with Orchid Pharma up a whopping 74 per cent, Glenmark, Lupin and Zandu Pharma up 48-50 per cent in these three months; Divi’s Labs and Dr. Reddy’s are up 28-30 per cent.

Understandably, mid-cap companies that have been the object of takeover attempts feature prominently in the gainers list — Orchid Pharma (stalked by Ranbaxy), IL&FS Investsmart (acquired by HSBC), Zandu Pharma (targeted by Emami) being cases in point. Among FMCGs, GSK Consumer has been a star performer, up by 33 per cent between March 18 and now.

On the other hand, investors who held media, cement or realty stocks in their portfolio would have reason to rue their choices with each of these sectors taking a severe drubbing since March.

Stocks such as Unitech and Sobha Developers are down over 30 per cent from their March levels; while IBN18 and Jagran Prakashan are down 33 and 28 per cent respectively. Ambuja Cement and Shree Cement have lost 28-30 per cent from their March values.

Given that mid-cap stocks have greater retail ownership, one trend that these investors can probably take comfort in is that, this time round, mid-cap stocks have not been battered as much as they were during the previous corrective phase.

Contrary to the usual pattern, mid-cap stocks appear to have fared marginally better than large caps in this choppy market.

On Monday’s close, the CNX Midcap was trading a shade higher than its mid-March levels, while the Nifty had plunged below its earlier lows.

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