Paytm, ZEEL, Delta Corp, IIFL Finance, UPL among stocks that tanked up to 57% in FY24

Financial year 2023-24 ended with big gains for the equity investors but a handful counters turned out to be wealth destroyers for the investors during the given year. Despite a 30 per cent rise in the BSE Sensex and Nifty50 index, a dozen of stocks saw a steep sell off during the period.

According to the data from Ace Equity, 12 stocks in the BSE500 index dropped between 20-55 per cent between April 2023 to March 2024 period. Majority of these stocks had their own reasons including regulatory actions or governance issues, while others went down amid the rising pressure in these sectors.

The rally in the market was driven by a selected names and nota broad-based rally, said some of the market experts. In the entire rally of 2023, the majority of the bluest of blue chip names apart from a few, said Rahul Ghose, CEO, Hedged, a trading platform.

The non-performance of some sectors or stocks in FY24 can be attributed to strategic reasons or industry or stock-specific reasons and not to macro reasons, said Atul Parakh, CEO at Bigul, a discount broker.

The list of laggards was topped by Rajesh Exports, which plunged 57 per cent in the last one year. The stock prices of diamond & jewellery players dwindled to Rs 263.1 on March 28, 2024 from Rs 605.75 on March 29, 2023. The stock has been hit hard on the back of regulatory concerns and flop quarterly earnings.

Delta Corp (down 38 per cent), One97 Communications also known as Paytm (down 36 per cent), Zee Entertainment Enterprises (down 37 per cent, UPL (down 35 per cent) and Campus Activewear (down 34 per cent) are some other stocks which lost more than one-third of its value in the given year.

Shares of Paytm were in a downward spiral after RBI ordered it to wind up its payments bank business and senior management resignations, while Zee Entertainment was hit after its deal with Sony was called off. The media major was allegedly involved in an accounting fraud. UPL recently exited the Nifty50 index after a prolonged period of muted performance.

Recently, global brokerage firm Bernstein initiated coverage on Paytm with a 12-month target price for Paytm at Rs 1,100. However, CLSA had downgraded Zee Entertainment to 'sell' from 'buy' with a revised target price of Rs 198. Kotak Institutional Equities has downgraded UPL to 'sell' with a target price of Rs 390.

Orient Electric, TCI Express, IIFL Finance, Navin Fluorine International, Sterlite Technologies and KRBL also tumbled 20-28 per cent during the financial year 2023-24, turning into wealth destroyers for the investors.

IIFL Finance was barred from sanctioning or disbursing gold loans and a special audit was announced by the RBI. Navin Fluorine has been struggling to hold its margins, while Sterlite Technologies is struggling over demand headwinds. KRBL is down over the export ban of the rice by the government.

HDFC Securities has an 'accumulate' rating on Orient Electric with a target price of Rs 260, while Axis Direct has suggested to buy Navin Fluorine with a target price of Rs 3,430. Motilal Oswal has a target price of Rs 1,450 on TCI Express with a 'buy' recommendation on the stock.

FY25 is going to be a year of consolidation for the Indian markets, said Ghose from Hedged. "While the consensus is saying that there is going to be a correction post the election results, it is important to understand that the markets almost never follow consensus opinion. A correction is imminent but will come at a time when everyone least expects it," he said.

The bottom end of the Nifty range in the correction will be 19,000 and the higher end of the range for this year will be 24,500, this will be the broad range for FY25. It is also key to note that FY 25 will be a year of wild swings and not as easy to trade as 2024 which was more or less straight line up barring very few jolts, Ghose adds.