scorecardresearchMarket at record level but these 7 Nifty50 stocks are trading 20-45% below their 52-week highs

Market at record level but these 7 Nifty50 stocks are trading 20-45% below their 52-week highs

Updated: 25 Nov 2022, 07:08 PM IST
TL;DR.
The Sensex has risen 2.51 percent so far this month after nearly 5.5 percent rally in the preceding month, while the Nifty50 has produced a return of 2.78 percent so far in the current month after a 5.37 percent rally in the month before.
The Nifty50 has produced a return of 2.78 percent so far in the current month after a 5.37 percent rally in the month before.

The Nifty50 has produced a return of 2.78 percent so far in the current month after a 5.37 percent rally in the month before.

When recession-related concerns are preventing major global indices from rising, Indian stock market has broken records. On Friday, November 25, the S&P BSE Sensex index rose 0.28 percent to hit a record high of 62,447, surpassing its previous high of 62,412, set on the previous day, while the Nifty50 reached a new 52-week high of 18,534.90 during the trade and is just 0.48 percent or 91 points away from its record high of 18,604. 

The banking, automobile, FMCG, and metal stocks all played significant roles in driving indices to new highs. The Sensex has risen 2.51 percent so far this month after nearly 5.5 percent rally in the preceding month, while the Nifty50 has produced a return of 2.78 percent so far in the current month after a 5.37 percent rally in the month before.

YTD, the Nifty PSU Bank index stood as the top-performing index among all NSE indices with a rally of almost 60 percent, followed by Nifty Bank and Nifty Auto.  

Despite Indian equity markets hitting new record highs, seven stocks from the Nifty50 index are still trading below their 52-week highs by 20 percent–45 percent.

With a 45 percent decline from its one-year high, Wipro stock is currently the Nifty50 index's biggest underperformer. Since hitting a 52-week high of 726 apiece in January of this year, the stock has been steadily falling.

On October 14, the stock marked one of the largest one-day declines of 7.3 percent, the highest since May 2022, after the company announced revenue growth guidance of 0.5–2 percent for the third quarter of FY23.

The Street was unimpressed by Wipro's second-quarter results, which were released on October 13. The company reported a 9 percent YoY decline in its consolidated net profit at 2,649 crore for the quarter that ended September, owing to higher employee costs, rising subcontracting costs, and higher onsite expenses, which pushed up overall expenses.

Following the September quarter numbers, ICICI Securities cut its revenue estimates for Wipro by 0.6 percent and 1.4 percent for FY23 and FY24 due to slowing demand in the consulting business.

The brokerage valued Wipro at 15x FY24E earnings, resulting in a revised target price of Rs. 372. While Axis Securities, on the other hand, maintains a 'hold' rating on the stock with a target price of Rs. 440 per share.

Scrip NameLTP52-week high% fall from 52-week high
Wipro402.80726.8044.58
Tech Mahindra1,080.151,83841.23
Divi's Laboratories3,3425,07734.17
Hindalco Industries440.6563630.72
ONGC140.55194.9527.90
Tata Steel106.20138.6723.42
BPCL324.55406.9020.26

Tech Mahindra, another blue-chip IT stock, was next on the list, having dropped 41.23 percent from its 52-week high of 1,838.

Shares of Divi's Laboratories plunged 34.17 percent from its 52-week high of Rs. 5,077, marked on November 21, 2021. The stock started to decline in May of this year, and lost almost 20 percent of its value in the same month. The stock experienced even more pressure recently after it reported a 20 percent fall in its consolidated net profit to 494 crore in the second quarter of the current financial year compared to a net profit of 606 crore in the July-September period of the last fiscal.

Since its Q2 announcement, the shares of the company have fallen by 10.89 percent. Following the release of the second quarter earnings, global brokerage firm Jefferies maintained an ‘underperform’ rating on the stock, with a price target of Rs. 3,017/share. The brokerage anticipates that Divi's Lab's growth levers will only kick in in the financial year 2024, while its near-term outlook remains uncertain, as reported by CNBC-TV18.

Hindalco Industries, the Aditya Birla Group's metals flagship, is ranked fourth, with a 30.72 percent drop from its 52-week high of 636. The stock began its downward journey in March, and it fell 50 percent in just three months ending in June. The stock, however, recovered some of its losses and is now trading 42 percent above its 52-week low.

Other stocks, including ONGC, Tata Steel and BPCL, also witnessed a 20 to 28 percent decline from their 52-week highs.

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: 25 Nov 2022, 07:08 PM IST