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It was rather a rough week for Indian markets, with the equity benchmarks losing over 1.5 per cent on Friday alone.
During the week, BSE Sensex shed over 2.4 per cent and closed below 60,000 for the first time in two months.
Concerns over the impact of rapid spread of Covid in China on global economies had possibly triggered a sell-off in Indian markets. Notably, the sell-off was broad based, with pharma possibly being the only outperformer last week.
On Friday, while most of the sectoral indices witnessed 2-5 per cent slide, BSE Healthcare Index witnessed the least decline, shedding 1.18 per cent.
Several pharma companies featured in the list of stocks that bucked the market weakness last week. This list includes Abbott India, Divis Laboratories, Ajanta Pharma, Lupin, Thyrocare, Zydus Life and Suven Pharma among others.
Here are the detailed related to top three performers last week -
JBM Auto
The stock of auto component maker JBM Auto gained 12 per cent in the last five sessions. A tier-1 supplier of components to leading OEMs (original equipment makers) and manufacturers of electric and CNG buses, the stock is believed to be a big beneficiary of the expected demand uptick for passenger vehicles over the next 2-3 years.
Diversifying into EV buses has given a big boost to the company. The company supplies to all leading auto OEMs such as Ashok Leyland, Bajaj Auto, Ford, Honda, and Hero Motorcorp.
Normalisation of inventory and strong demand recovery on the back of new launches should help the company’s performance in the medium-term. In the latest September quarter, the company’s revenue grew 37 per cent to ₹1,029 crore, while the net profit for the period grew 44 per cent to ₹36 crore. The stock currently trades 30.2 times its trailing twelve-month earnings.
UTI Asset Management Company
Second in the list is the stock of UTI Asset Management Company (AMC), which gained 8 per cent in the week.
There was a speculation that the Tata Group was in the final leg of discussions regarding a potential acquisition of majority stake in this State-owned asset management company.
Bank of Baroda, State Bank of India, Punjab National Bank and Life Insurance Corporation of India collectively own 45.16 per cent stake in UTI AMC and are expected to divest their stake to Tata Group.
It is expected that, post the completion of transaction, Tata AMC will be merged with UTI AMC, making it the fourth largest in the country in terms of assets under management.
In the latest September quarter, the company’s revenue grew by about 15 per cent to ₹436 crore. Even as the operating profit improved by a percentage point to 62 per cent, higher tax outgo resulted in a flattish net profit. The stock currently trades at 2.9 times its September 2022 book value.
Abbott India
Third in the list is the stock of Abbott India. The stock of this drug maker has gained 6 per cent in the last five sessions. Concerns over the new Covid variant in China has put focus back on the Indian pharma and healthcare industry. While 98 per cent of the company’s revenues come from domestic operations, it exports small quantities to Sri Lanka, Nepal, Bhutan, Maldives, etc.
In the September 2022 quarter, the company’s revenue grew 12.8 per cent to ₹1,379 crore, while operating profit margin improved by about 4 percentage points to 25 per cent. Also, net profit grew 38.5 per cent year-on-year to ₹266 crore.
The stock currently trades about 52 times its trailing twelve-month earnings.
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