The Indian benchmark indices witnessed sharp volatility in January after a decent end to 2022. The Nifty50 and Sensex have corrected by around 2.45% and 2.12%, respectively, in the last month, with the majority of the losses occurring in the last four trading days following allegations made against the Adani group by short-seller Hindenburg Research.
The Nifty 50 began to fall sharply on January 25, a day after the Hindenburg released a research report alleging that Indian conglomerate Adani Group was involved in accounting fraud and raised new concerns about the group's debt and shareholding pattern of four listed companies in the group. Since then, the Index has fallen over 456 points or 2.51% to 17,662.
The selloff was widespread, as mid-and small-cap stocks also suffered strong losses; the BSE Midcap index fell 2.65% in January, while the small-cap index is down by 2.49%.
FPIs also turned into net sellers as they pulled out ₹15,236 crore from Indian equities in the first three weeks of January on the back of attractive Chinese markets and concerns about the US economy entering a recession.
China ended its “zero-Covid” policy nearly three years, and analysts are anticipating a modest impact on the Indian markets in the short term. Since China is the world's largest consumer of crude oil, reopening the country will also increase oil demand, which will be bad for the Indian market and economy.
Despite market turbulence, 13 stocks in the Nifty 500 index delivered returns in the range of 12-23% in January.
Max Financial Services topped the list with a return of 23.3% in January, moving from ₹677.50 to ₹835.65. The stock kicked off 2023 strongly, as it rallied nearly 14% in the first seven trading sessions and maintained the same trend towards the end of the month. Out of 21 trading days in last month, the stock ended 15 in the green.
| Scrip Name | Monthly Returns |
| Max Financial Services | 23.3% |
| Persistent Systems | 21.1% |
| Rajesh Exports | 19.5% |
| Tata Motors | 16.5% |
| Mahindra CIE Automotive | 14.7% |
| PNC Infratech | 13.9% |
| Polycab India | 13.7% |
| eClerx Services | 13.5% |
| Ratnamani Metals & Tubes | 13.5% |
| Coforge | 12.7% |
| Hindustan Copper | 12.5% |
| Grindwell Norton | 12% |
| CG Power and Industrial Solutions | 11.9% |
The stock saw its bull run after Axis Bank announced that it would buy the remaining stake in Max Life from Max Financial Services. This deal took place at a time when the promoter of MFS is attempting to lower its debt. Analysts expect the company to benefit from this transaction going forward.
In 2022, shares of Max Financial Services underperformed the market, losing 28.83 percent of their value, steadily falling from Rs. 952.15 apiece to Rs. 656.
Persistent Systems was the very next list, with a rally of 21.1% to ₹4,687.55 in January. The stock witnessed a sharp surge since January 19, after the company reported a 35.22% YoY jump in its consolidated net profit to Rs. 237.9 crore for the December ending quarter.
Over the last six months, the stock zoomed by 29%, while in the last three-year period, the stock delivered a staggering return of 566%, climbing from Rs. 703.35 apiece to the current level of Rs. 4687. Furthermore, over the last five years, the stock has returned an astounding 493% to its shareholders.
Rajesh Exports stood as the top-third gainer in the Nifty 500 Index. After reaching a 2-month low of ₹636 apiece on December 23, 2022, the stock has seen a surge in buying and climbed to ₹874 levels, producing a return of 37.42%. Overall, in January, it returned 19.5%.
Tata Motors was another big mover last month. In December, the stock lost 10% of its value and was approaching its 52-week low of ₹366.2, set in May 2022. However, the stock has managed to rise since then, and after the company reported a significant 13% year-on-year increase in JLR wholesales, the stock gained more traction and closed the month with a 16.5% return.
Shares of Mahindra CIE Automotive extended their bull run in the previous month by rising 14.7% to ₹394.75 apiece after generating a solid return of 47% in CY22. In Tuesday's intraday session the stock marked a new 52-week high of ₹400. At current levels, the stock is trading 140.85% higher than its 52-week low of ₹164.
In its latest report, ICICI Direct Research maintained its "buy" rating on the stock with a revised target price of Rs.410 apiece from an earlier price of Rs. 380.
Other stocks including PNC Infratech, Polycab India, eClerx Services and Ratnamani Metals & Tubes also witnessed gains between 13.5-14% in January.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
