Pharma, chemical stocks lead under lockdown, Aurobindo is top performer

Within BSE-500, 79% stocks gave positive returns in two months of lockdown

Markets have seen strong signs of recovery during the lockdown, with pharma and chemical sector stocks delivering 14-100 per cent gains during this period.

An analysis of BSE500 universe shows 79 per cent (or 395 stocks) delivered positive returns, while 21 per cent (or 105 stocks) gave negative returns during the lockdown, starting March 25. 

“After the sell-off in March, the indices started reflecting concerns. After lockdown, there was expectation that the situation could be brought under control,” said Deepak Jasani, head-retail research, HDFC Securities.

Among pharma stocks, Aurobindo Pharma has been a top performer, with over 2x returns (142 per cent gains). Cipla, Jubilant Life Sciences, Glenmark Pharma, and Alembic Pharma have given 66-92 per cent returns.  

As many as 30 pharma stocks in BSE500 universe have delivered over 18.79 per cent returns posted by the index during the past two months.

Apart from Indian pharma, which is expected to gain from global health care needs in the wake of the Covid-19 pandemic, chemicals is another sector expected to gain traction from the build-up of negative perception towards China.

 

 

The top performers in the chemical pack include Nocil, Deepak Nitrite, Gujarat Alkalies and Chemicals, and Alkyl Amines Chemicals, which gained between 56 per cent and 74 per cent during the period.

As many as 15 chemical stocks have outperformed the BSE500 index. “Chemical supply chain is also likely to look beyond China. The expectation is that Indian companies will benefit, given their competencies in the space,” Jasani added.

Consumer staples stocks have also delivered robust returns. Among the fast-moving consumer goods (FMCG) segment, nine stocks have outperformed the BSE500 index.

These include Parag Milk Foods (63.24 per cent), Britannia Industries (48.25 per cent), Heritage Foods (48.25 per cent), and Marico (33.4 per cent).

“FMCG stocks offered earnings visibility during the lockdown period,” said S Ranganathan, head of research, LKP Securities.

Meanwhile, banks and non-banking financial companies (NBFCs) have been among the worst hit. As many as 30 bank stocks have underperformed the BSE500 index. As many as 35 NBFC stocks have underperformed. “The moratorium on loans has raised concerns for both banks and NBFCs,” added Ranganathan.

Among banks, Bank of Baroda (minus 31.23 per cent), DCB Bank (minus 30.25 per cent), Punjab National Bank (minus 24.68 per cent), and State Bank of India (minus 16.63 per cent) have been among worst performers. Among NBFCs, Cholamandalam Finance (minus 37 per cent), Repco Home (32.79 per cent), IIFL Finance (minus 21 per cent) and Bajaj Finance (minus 19.19) have been among worst performers.

Real estate stocks have also been under pressure, with seven underperforming BSE500. Sunteck Realty, Brigade Enterprises, and Oberoi Realty have given 18-25 per cent negative returns.