Three of every four stocks on the BSE500 are in the bear grip, with at least 10 index constituents losing over half of their market capitalisations from 52-week high levels, data compiled from corporate database AceEquity suggests. They include many retail investor favourites such as Adani Power Ltd and YES Bank Ltd.
A total of 371 of 500 index stocks -- 74 per cent, are off 20 per cent or more from their one-year high levels. "The constant refrain from many saner voices that the broader market is overpriced and may correct sharply is now playing out. Reversion to mean valuations are happening in large caps, too," said V K Vijayakumar of Geojit Financial Services. Sun Pharma Advanced Research Company Ltd has lost 63 per cent to Rs 174.55 from its April 2024 high of Rs 474. This company has been reporting losses for the past many quarters now. Adani Green Energy Ltd has bled 59 per cent to Rs 889.90 from June 2024 high of Rs 2,173.65 amid bribery allegations.
Honasa Consumer Ltd dived 56 per cent each, as Q2 print was hit by inventory correction, weaker than expected performance in Mamaearth and challenging demand scenario, leading to analysts slashing EPS estimates by up to 40 per cent for FY25-27.
Chennai Petroleum Corporation Ltd (CPCL), Zee Entertainment Enterprises Ltd, Cochin Shipyard Ltd, Mangalore Refinery And Petrochemicals Ltd, Garden Reach Shipbuilders & Engineers Ltd and PNC Infratech Ltd tanked anywhere between 50 per cent and 54 per cent. CPCL has been falling following a decline in Q1 profit, followed by a loss in Q2.
In the case of Zee Entertainment, Emkay Global said its ad revenue growth should remain under pressure, as companies curtail their spending in a weak macro environment. Subscription revenue should report steady growth in Q3, albeit slower than the last couple of quarters. "Other sales and services revenue should be weak, given no major movies have been released in the quarter. Margins should also remain under pressure in the absence of revenue growth and ramp-up of marketing expenses," it said.
Cochin Shipyard shares declined amid defence PSU's normalising margins and uncertain pipeline. In the case of GRSE, Elara last month suggested a target price of Rs 1,660, raising the value of core shipbuilding to Rs 1,429, given improved order pipeline, with the order for next generation Corvettes expected soon.
"In our view, large-cap. stocks may hold up better in the next few months while midcap, smallcap and ‘narrative’ stocks will see further severe correction if the alignment to fundamentals and value were to continue. There is no reason to expect otherwise," Kotak Institutional Equities said.
PNC Infratech Ltd, down 51 per cent, is another stock losing half of its market value. The company and its two subsidiaries were disqualified by MoRTH from participating in any new tender process of the ministry, including NHAI and NHIDCL, for one year due to a bribery case filed by the CBI involving four employees of the company. The Delhi High Court recently asked MoRTH and NHAI to consider the representation by the company, seeking revocation of the disqualification.
Adani Power Ltd, Sterling and Wilson Renewable Energy Ltd, RBL Bank Ltd, MMTC Ltd, Adani Energy Solutions Ltd, Alok Industries Ltd, Tanla Platforms Ltd and Ircon International Ltd fell 48-49 per cent each from their respective one-year high levels. Godfrey Phillips India Ltd, Hindustan Zinc Ltd, YES Bank Ltd, Easy Trip Planners Ltd and Adani Total Gas Ltd also declined 47-48 per cent during the same period.