 "20 companies lost over Rs 2-lakh crore market-cap in first half of 2017")
Twenty companies have lost over Rs 2 lakh crore in market capitalisation (market-cap), even though the equity markets are set to post their best performance in past three years on half yearly basis.
The S&P BSE Sensex has rallied 16% during the first half (January- June) of the current calendar year 2017, its best performance since 2014. The benchmark index closed 30,858 on Thursday, hit a record high of 31,523 on June 22, 2017 in intra-day trade.
Earlier, between January and June, 2014, the benchmark index had rallied 20%.
Foreign institutional investors (Rs 55,186 crore) and mutual funds (Rs 38,699 crore) have collectively made net inflow of Rs 93,885 crore in Indian equities during first six months of the current calendar year 2017, the Sebi data shows.
However, the total market-cap of these 20 firms fell by Rs 2.28 lakh crore from Rs 19.32 lakh crore as of December 30, 2016 to Rs 17.04 lakh crore on June 29, 2017. While, total 95 companies recorded negative returns have seen their combined market-cap erosion of Rs 2.64 lakh crore.
Five public sector undertaking (PSU) companies – Oil and Natural Gas Corporation (ONGC), Coal India, Oil India, NTPC and NMDC have collectively lost Rs 94,407 crore m-cap.
ONGC, the largest loser in terms of m-cap erosion, has lost Rs 43,056 crore m-cap, while Coal India lost m-cap of Rs 34,017 core in first six months of CY17. Both these stocks have fallen 18% each during the period.
The brokerage firm however recommended ‘buy’ rating on ONGC with price target in the range of Rs 221 to Rs 295.
“We remain positive on ONGC’s prospects, with potential of strong oil & gas output over FY18-21E, growing contributions from ONGC Videsh (OVL) and MRPL, and the improving prospects of ONGC Petro Additions (OPaL),” said analysts at IDFC Securities.
“We reiterate Buy as we believe ONGC will outperform with improvement in rising gas production and controlling operating expenses. We value ONGC using DCF, assuming USD 56/bbl long-term crude realization and USD-INR rate at 65. Our implied value of proved reserves is at USD 4.5/boe and probable & OVL reserves at USD 2.3/boe,” said analysts at Elara Capital in recent report.
About eight pharmaceutical companies include Sun Pharmaceutical Industries, Lupin, Dr Reddy’s Laboratories and Glenmark Pharmaceuticals have eroded investor’s wealth of Rs 65,552 crore.
The pharma stocks have fallen by up to 29% thus far in 2017, due to disappointing financial performance in March quarter. Indian drug makers are facing pricing pressures and greater regulatory scrutiny in the US, their largest market.
“Indian pharma companies have seen a significant correction / multiple de-rating due to an uncertain regulatory environment and pricing pressure (on account of increased competition). On the domestic front, the impending GST roll-out is likely to result in temporary difficulties (channel disruption) in H1FY2018. The appreciating Indian rupee is likely to add further pressure on businesses in the near term. Therefore, we expect earnings growth in FY2018 and FY2019 to remain under pressure,” analyst at Sharekhan said in Q4FY2017 results review.
The brokerage firm warrants a cautious outlook for the Pharma sector for the next 12-18 months and advice investors to stay selective. Also, the progress of Pharma companies in Complex Generics and Specialty segments will be the key monitorables, as quality of the pipeline will be crucial for the re-rating of the sector multiples going ahead.
Infosys, Tech Mahindra and Tata Motors have lost m-cap between Rs 9,600 crore and Rs 18,500 crore. The debt-ridden companies such as Videocon Industries and Reliance Communications have seen their market value erosion of 83% and 38%, respectively.
The S&P BSE Sensex has rallied 16% during the first half (January- June) of the current calendar year 2017, its best performance since 2014. The benchmark index closed 30,858 on Thursday, hit a record high of 31,523 on June 22, 2017 in intra-day trade.
Earlier, between January and June, 2014, the benchmark index had rallied 20%.
Foreign institutional investors (Rs 55,186 crore) and mutual funds (Rs 38,699 crore) have collectively made net inflow of Rs 93,885 crore in Indian equities during first six months of the current calendar year 2017, the Sebi data shows.
However, the total market-cap of these 20 firms fell by Rs 2.28 lakh crore from Rs 19.32 lakh crore as of December 30, 2016 to Rs 17.04 lakh crore on June 29, 2017. While, total 95 companies recorded negative returns have seen their combined market-cap erosion of Rs 2.64 lakh crore.
Five public sector undertaking (PSU) companies – Oil and Natural Gas Corporation (ONGC), Coal India, Oil India, NTPC and NMDC have collectively lost Rs 94,407 crore m-cap.
ONGC, the largest loser in terms of m-cap erosion, has lost Rs 43,056 crore m-cap, while Coal India lost m-cap of Rs 34,017 core in first six months of CY17. Both these stocks have fallen 18% each during the period.
The brokerage firm however recommended ‘buy’ rating on ONGC with price target in the range of Rs 221 to Rs 295.
“We remain positive on ONGC’s prospects, with potential of strong oil & gas output over FY18-21E, growing contributions from ONGC Videsh (OVL) and MRPL, and the improving prospects of ONGC Petro Additions (OPaL),” said analysts at IDFC Securities.
“We reiterate Buy as we believe ONGC will outperform with improvement in rising gas production and controlling operating expenses. We value ONGC using DCF, assuming USD 56/bbl long-term crude realization and USD-INR rate at 65. Our implied value of proved reserves is at USD 4.5/boe and probable & OVL reserves at USD 2.3/boe,” said analysts at Elara Capital in recent report.
About eight pharmaceutical companies include Sun Pharmaceutical Industries, Lupin, Dr Reddy’s Laboratories and Glenmark Pharmaceuticals have eroded investor’s wealth of Rs 65,552 crore.
The pharma stocks have fallen by up to 29% thus far in 2017, due to disappointing financial performance in March quarter. Indian drug makers are facing pricing pressures and greater regulatory scrutiny in the US, their largest market.
“Indian pharma companies have seen a significant correction / multiple de-rating due to an uncertain regulatory environment and pricing pressure (on account of increased competition). On the domestic front, the impending GST roll-out is likely to result in temporary difficulties (channel disruption) in H1FY2018. The appreciating Indian rupee is likely to add further pressure on businesses in the near term. Therefore, we expect earnings growth in FY2018 and FY2019 to remain under pressure,” analyst at Sharekhan said in Q4FY2017 results review.
The brokerage firm warrants a cautious outlook for the Pharma sector for the next 12-18 months and advice investors to stay selective. Also, the progress of Pharma companies in Complex Generics and Specialty segments will be the key monitorables, as quality of the pipeline will be crucial for the re-rating of the sector multiples going ahead.
Infosys, Tech Mahindra and Tata Motors have lost m-cap between Rs 9,600 crore and Rs 18,500 crore. The debt-ridden companies such as Videocon Industries and Reliance Communications have seen their market value erosion of 83% and 38%, respectively.
| M-cap in Rs crore | Price in Rs | |||||
| Company | 29/06/2017 | chg* | Company | 29/06/2017 | % chg* | |
| ONGC | 202637 | -43056 | Videocon Inds. | 19.85 | -81 | |
| Coal India | 152206 | -34017 | Rcom | 21.95 | -36 | |
| Sun Pharma.Inds. | 129203 | -21893 | Religare Enterp. | 175.1 | -31 | |
| Lupin | 47718 | -19264 | Glenmark Pharma. | 627.95 | -29 | |
| Infosys | 213501 | -18651 | Lupin | 1056.35 | -29 | |
| TCS | 446919 | -18486 | Siti Networks | 27.65 | -27 | |
| Tata Motors | 139550 | -11757 | Indoco Remedies | 192.2 | -26 | |
| Tech Mahindra | 37924 | -9633 | IDBI Bank | 53.5 | -23 | |
| Glenmark Pharma. | 17721 | -7351 | Dr Lal Pathlabs | 835.05 | -22 | |
| Oil India | 20092 | -6999 | HCL Infosystems | 45.2 | -22 | |
| Dr Reddy's Labs | 43879 | -6807 | Oil India | 265.55 | -21 | |
| NTPC | 130402 | -5401 | Inox Wind | 143.25 | -21 | |
| NMDC | 34123 | -4936 | Tech Mahindra | 388.85 | -20 | |
| Divi's Lab. | 16948 | -3841 | Texmaco Rail | 87.9 | -20 | |
| IDBI Bank | 11015 | -3274 | Sonata Software | 156.75 | -19 | |
| Rcom | 5463 | -3012 | Divi's Lab. | 638.4 | -18 | |
| Videocon Inds. | 664 | -2811 | Coal India | 245.2 | -18 | |
| Torrent Pharma. | 20091 | -2169 | Syngene Intl. | 459.75 | -18 | |
| Glaxosmit Pharma | 20981 | -2145 | Aban Offshore | 188.5 | -18 | |
| Ajanta Pharma | 13612 | -2082 | Advance. Enzyme. | 326.35 | -18 | |
| *Change over December 30, 2016 | ||||||
| From BSE 500 index | ||||||
| Source: CaptitalinePlus | ||||||
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