scorecardresearch15 mid-cap stocks have lost 25-55% of their value in 2022 so far; Metropolis

15 mid-cap stocks have lost 25-55% of their value in 2022 so far; Metropolis Healthcare biggest laggard

Updated: 20 Jul 2022, 10:27 AM IST

Metropolis Healthcare was the Nifty Midcap index's biggest laggard. The stock has lost more than half of its value since 2022. Another stock, PB Fintech, which made its stock market debut in November 2021, was down 44.62%.

FILE PHOTO: A bird flies past the Bombay Stock Exchange (BSE) building in Mumbai, India, January 31, 2020. REUTERS/Francis Mascarenhas

FILE PHOTO: A bird flies past the Bombay Stock Exchange (BSE) building in Mumbai, India, January 31, 2020. REUTERS/Francis Mascarenhas

The Indian equity markets continued their rally for a third consecutive session on July 19. The Sensex rose 246 points, or 0.45%, to end at 54,767.62, while the Nifty settled 62 points, or 0.38%, higher at 16,340.55.

The NSE Midcap 100 and Smallcap 100 indices closed at 0.67% and 1.02% higher, respectively. However, since the beginning of 2022, the Nifty Midcap 100 Index has fallen 6.05 per cent. Since the start of the year, the index has dropped approximately 2,188 points, falling to 28,600.95 from 30,788.00.

In the Nifty Mid-Cap 100 index, 55 stocks have fallen between 10-56 per cent since the start of the year, and 15 stocks have corrected by 25 to 55 per cent.

Metropolis Healthcare was the biggest loser in the Nifty midcap 100. The stock has been declining since the start of the year. The stock is down 58.46% from its 52-week high of Rs. 592, recorded in December 2021, and with Tuesday's closing price of Rs. 1,492.55, the stock is just 8.27% away from its 52-week low.

In just three months, it has fallen 38.59%, while it has lost 56.62% of its value to 1,492 from 3.440 so far in 2022. Furthermore, in the last one year, the stock has corrected by almost 47.53%.

On the technical charts, the stock is trading 61.30 per cent below its 200 DMA and 6.25 per cent below its 50-DMA. The Relative Strength Index (RSI) of the stock stands at 47.9.

Metropolis made its stock market debut on April 15, 2019. The company raised 1,204 crore by issuing shares at a price of 880 per share. The stock hit a record high of 3,579 on December 30, 2021, and an all-time low of 904.85 on May 14, 2019.

Over the past few months, there has been a lot of buzz around the stake sale by the promoters. On May 21, Bloomberg reported that MHL is looking to raise more than $300 million and bring on board a strategic partner by selling a significant minority stake.

However, on June 11, Metropolis clarified that its promoters have no intention of exiting the business, Business Standard reported.

"The company, its promoters and management team are committed to operating Metropolis Healthcare Ltd with the highest standards of medical science, stakeholder trust and customer engagement," the company said.

PB Fintech, the parent company of Policy Bazaar and Paisa Bazaar was the second top loser. PB Fintech made its stock market debut in November 2021. The insurance and financial aggregators made a decent debut on the exchanges. The scrip was listed at a premium of 17.34 per cent at 1,150 on the NSE as against the issue price of 980.

However, the stock has fallen 64.12% from its 52-week high of Rs. 1,470, which was reached on November 17, 2021. Since the start of the year, the stock has been corrected by almost 44.62%. During Monday's intraday, the stock hit an all-time low of 521.50.

Meanwhile, Kotak Institutional Equities initiated coverage on the stock with a target price of Rs700/share, signalling a 20% upside from its latest closing price. The brokerage house believes that high multiyear growth will lead to consistent market share gains, thus improving unit economics and driving operating leverage over time.

Scrip NameLast traded PriceFall from Jan 22 (%)52 -Week highFall from 52 week high (%)
Metropolis Healthcare1,49256.62% 3,57958.31%
PB Fintech526.344.62%NANA
ICICI Securities455.8042.27% 89649.04%
Manappuram Finance Ltd94.542.37%224.5057.91%
L&T Technology Services3,188.244.30%2,70537.50%
Dr. Lal Pathlabs Ltd.2,019.544.00%4,24552.37%
Coforge Ltd3,411.141.00%6,13544.39%
IndiaMart InterMesh Ltd4,10437.15%9,170.757.70
The Ramco Cements 66732.45%1,132.740.95%
Clean Science & Technology1,690.932.89%2,70537.50%
Deep Nitrite 1,76828.50%3,02041.40%
Tata Communications994.328%1,59237.49%

Shares of ICICI securities have dropped more than 27% in the last three months. The stock is down 40.26 per cent in the last one year.

So far in 2022, the Indian brokerage’s stock has erased 42.27 per cent of shareholders' wealth as against the benchmark Sensex, which has slipped over 9 per cent during the same period.

As reported by CNBC TV18, Citi has cut its target price for ICICI securities to 400/share from 600/share. It said that ICICI securities' average cash turnover at the NSE in June fell to 30 per cent below the levels in the fourth quarter of FY22.

According to the brokerage firm, the average cash turnover has dropped dramatically, which has a negative impact on revenue, and the planned Capex in the tech platform is causing cost pressure.

It has also reduced its FY23 and FY24 estimates for ICICI Securities by 19 and 18%, respectively, and has reduced the target multiple to 13x.

The Manappuram stock price is up by 9.57% in the last month. However, the stock is currently trading 57.91% below its 52-week high. The stock has plummeted by 42.37% since the start of the year. Over the last one year, the stock lost its value by 48.45%.

Due to high operating expenses, the company reported a 44 per cent year-on-year (YoY) decline in its consolidated net profit at 261 crore for the March 2022 quarter as against a profit of 468 crore in the year-ago quarter. Meanwhile, its net interest income (NII) fell 10.2 per cent year on year to 986 crore from 1,098 crore, while its consolidated assets under management (AUM) fell sequentially to 30,300 crore from 30,400 crore in Q3FY22.

On the BSE, L&T Technology Services shares closed at Rs. 3,248.30 (down 5.75 per cent) on Tuesday. Taking Tuesday's closing price into account, the stock has fallen 44.30 per cent since the beginning of the year. The stock is trading 16% below its 200-DMA.

The Indian IT sector was hit by concerns over the recession, rate hikes, and downgrades from global brokerage firms. Although IT companies are reporting strong order pipeline and deal wins, analysts are worried that the demand environment could change if the US economy hits a recession.

Besides the US, the European market is also feared to be heading into a recession as the Ukraine-Russia war, soaring energy prices and prospects of higher interest rates push the EU to the brink of a recession over the next two years. The US and UK markets are critical for Indian IT companies, accounting for 40-78 per cent of revenue.

Further, the falling rupee isn't benefiting the Indian industry. When the rupee falls, IT businesses benefit because it increases their profit margins. Big IT companies get a large portion of their revenue in dollars from US clients.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.


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First Published: 20 Jul 2022, 10:23 AM IST