Besides the pandemic, the year 2020 has gone down in the history as the year of windfall gains for investors following sharp rally in benchmark indices with wealth getting multiplied in stock-specific movements.
The buzz of the street was billionaire Adani Green Energy Ltd’s multi-bagger performance on the bourse. The Gautam Adani group stock started 2020 with ₹174.75 on NSE, but Covid-19 lockdown pulled it down to its 52-week low of ₹111.9 in March. But since then, the green energy arm of the diversified conglomerate had a one-side rally to hit ₹1,220 on November 24 giving a phenomenal 990 per cent gain from the lows. The year-to-date gain for the stock is recorded at 530 per cent, which is far higher than the benchmark indices BSE Sensex and Nifty50 at close to 15 per cent.
Adani Group's other infrastructure companies, Adani Ports and Special Economic Zone Ltd (APSEZ) and Adani Transmission Limited (ATL) too witnessed handsome year-to-date gains of about 30-32 per cent. For the group’s city gas distribution arm Adani Gas Limited (AGL), the year-to-date returns were over 131 per cent. However, AGL stocks gained over 407 per cent from its 52-week lows during March. The stock ended at a high of ₹376.7 on NSE on December 31.
The flagship Adani Enterprises Limited (AEL), has seen 129 per cent year-to-date rise in the stock price to ₹477 on Thursday. AEL also has fetched over 335 per cent gains for the investors who jumped onto the ship when it was at the bottom at ₹116.4 in March.
Momentum stocks
According to analysts, most of them are high-beta stocks. “If the market trends up, Adani group stocks will do very well and vice-versa,” according to them.
Besides, some of the group companies have also surprised marketmen with financial performance.. For instance, APSEZ reported strong performance in Q2-FY21 on all counts – cargo growth, margins and cash flows. CLSA turned positive on imports volume rebound and addition of a new large customer.
Risk-on rally?
Explaining the recent rally in the market and overall stocks, Kishor Ostwal, CMD, CNI Research Ltd, said investors gained by catching the promising stocks at lower valuations during the lock down. “There are no major fundamental factors that have influenced the rally. The broader valuation favoured a rally and therefore we saw markets touching recent highs,” said Ostwal.