GNFC, Vedanta, Manappuram Finance: Stocks that rallied over 100% in CY16

Marksans Pharma, RCom, Just Dial, Jet Airways, Idea Cellular and Jubilant FoodWorks have lost 40% - 61%, data show

Had you invested Rs 1 lakh in either GNFC, Swan Energy, Vedanta or Manappuram Finance on December 31, 2015, your investment would have grown 104% - 165% by December 20, 2016. This, at a time, when the benchmark indices – the S&P BSE Sensex and the Nifty 50 – have gained around 2% each thus far in calendar year 2016.

Among other stocks in the BSE 500, Hindalco, Indian Bank, Sharda Cropchem, Biocon, Escorts and MOIL have appreciated 70% - 90% during this period. On the other hand, Marksans Pharma, Reliance Communications (RCom), Just Dial, Jet Airways, Idea Cellular and Jubilant FoodWorks have lost 40% - 61%, data show.

The road ahead for the markets, analysts say, will depend on how quickly the government can resolve issues related to demonetisation, which also will have a bearing on the financial performance of India Inc. At a global level, policies of major central banks, commodity prices – especially crude oil, and developments across euro-zone will influence market sentiment.

“Following demonetisation, the impact on the economy and the companies is more severe than what we have anticipated. Hence, we believe that there could be a significant downward reduction in earnings estimate for the Nifty for both FY17 as well as FTY18,” says R Sreesankar, co-head for institutional equities at Prabhudas Lilladher.

“Based on the existing earnings estimate, the Nifty EPS for FY17 is at Rs433.9 and FY18 is at Rs523.6. The probability of earnings growth for FY17 getting revised downwards significantly remain high and the same could also result in lower EPS expectation for FY18. While at the FY18 estimates of Rs 526.3, the Nifty trades at a PER of 16.4x, below the 10-year average of 18.3x and may look attractive, but should the revised earnings be at Rs 475 or so, the market would not be looking so cheap in relative terms.  This makes us believe that the market is fairly priced now and we are maintaining our trading range for the market at 7,600 – 8,300 levels,” he adds.