News Analysis

A roll call of leaders and laggards

Keerthi Sanagasetti BL Research Bureau | Updated on January 21, 2021

Only half the Sensex stocks have bettered the index’s return in the last 10,000-point journey

Since the Sensex first touched the 40,000 mark (intra-day) on May 23, 2019, only 16 out of 30 stocks in the benchmark index, have bettered the index’s 25 per cent return till date.

The high flyers

Asian Paints, whose stock price almost doubled to ₹2,715 since May 23, 2019, was the highest grosser of the lot. Dr. Reddy’s Laboratories that re-entered the index, in the recent re-constitution in December 2020, was another stock that saw gains of over 90 per cent in price since May 2019. The IT giant Infosys too gave its investors a 91 per cent return since May 23, 2020. Six other stocks — HCL Technologies, Bharati Airtel, Nestle India, TCS, Reliance Industries (RIL), and Bajaj Finance — posted returns of more than 50 per cent, since May 23, 2019.


The weight lifters

However, with the highest weight in the index, the rally up to the 50,000 levels was largely led by RIL, which has a 12.6 per cent weight in the index. RIL saw a 59 per cent jump in its stock price, since May 2019, to ₹2,098 apiece.

The HDFC twins (Bank and NBFC), which are the next highest weighted stocks in the index (10.7 and 8.6 per cent, respectively) surged by about 26 per cent during the same period.

Infosys, TCS and ICICI Bank — with weights in the range of 6-9 per cent each in the index, rallied by more than 30 per cent.

The slow marchers

Seven out of the remaining 14 stocks in the index saw a slower price rise compared to the index. Seven others saw negative returns in the 7-45 per cent range.

ONGC and IndusInd Bank were the worst of the lot, eroding more than 40 per cent of investor’s wealth.

The stock prices of NTPC and ITC declined by 26 per cent each since May-end 2019.

The other laggards were State Bank of India, Axis Bank and Larsen and Toubro, whose share prices fell by 14, 13 and 7 per cent, respectively.

Rejig stocks

During the period from May 2019 to date, the Sensex saw a rejig in its constituents four times — in June and December 2019, and 2020.

Following the cues from the index rejig would have helped save the losses for investors in Coal India and Yes Bank that fell about 46 and 65 per cent respectively, since their exit in June (Coal India) and December (Yes Bank) 2019. However, Tata Steel, which was eliminated from the Sensex in December 2020, saw a 12 per cent jump in its share price, since then.

This is following the on-going euphoria around commodity prices, more particularly metals.

Published on January 21, 2021

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