Bear grip: 25 stocks drop over 20% from 52-week highs in 30 days! Should you buy?

The latest round of profit booking at Dalal Street has not only wiped out more than Rs 20 lakh crore from the pockets of Indian investors, but also pushed more than two dozen counters of the BSE500 index, which scaled their respective 52-week high in the last one month, into the bear grip.
 

This means that these stocks, which scaled their individual highs in July 2024 are down at least 20 per cent in a month. A stock or index is said to be in a bear grip when it falls 20 per cent or more from its 52-week high. In the BSE500 index, more than 150 stocks or 30 per cent constituents were in bear grip, the these 25 counters have been the latest inclusion to the list.
 

Mohit Gang, CEO at MoneyFront said that markets for last few days have reacted badly amid fear of recession looming large on US, unwinding of global carry trade in Japan and geo-political scenario worsening in West Asia. This has led to deep cuts in equity portfolios across the globe especially for investors including India.
 

"Its very difficult to predict how long will this uncertainty last but none of this is borne out of economic conditions of India" he said. "Indian economy continues to be resilient and growing steadily. Long term investors need not panic or redeem in fear. If one has a horizon of 5 years and above, then they should stay-put with their investments."
 

BEML tops the list with a 29 per cent fall from its 52-week high at Rs 5,489.15, hit on July 05. The Multibagger PSU counter settled at Rs 3,896.95 on Tuesday, August 6. The Defence PSU on Monday reported a narrowing of its consolidated net loss to Rs 70.47 crore for the June 2024 quarter, while its consolidated income for the April-June 2024 period rose to Rs 634.61 crore.
 

Prabhudas Lilladher recently upgraded BEML to ‘accumulate’ from ‘hold’ with a revised target price of Rs 4,484 following the recent sharp correction in stock price. "BEML reported decent quarterly performance with 9.9 per cent YoY revenue growth and 85 bps YoY improvement in Ebitda margin," it said citing strong commentary from the management.
 

Chennai Petroleum Corporation also crashed nearly 29 per cent from its 52-week high at Rs 1,274 on July 16 to Rs 906.95. Jupiter Wagons (JWL) is another counter that tumbled more than 26 per cent its recent high to Rs 552.4 on Tuesday from Rs 748.05 a month ago on July 05.
 

The wagons business has become a steady state revenue and one can expect 25-30 per cent growth in that business in FY25, however JWL now also looks to penetrate new product markets, said Dalal & Broacha. "Considering the stock has rallied up significantly in the past 1 year we revise our rating from 'buy on dips' to 'hold' rating on the stock," it said with a target price of Rs 500.
 

Ircon International and MMTC are other three counters which have tumbled more than 25 per cent each from their 52-week highs in July 2024. Antique Stock Broking noted that the budgetary support was lower than expected for Ircon, while the Rs 21,000 crore high-speed rail capital outlay is positive for it.
 

Another Multibagger PSU Bharat Dynamics is also down more than 25 per cent from its 52-week high. The state-run defence player will announce its Q1FY25 earnings on Friday, August 9. Antique Stock Broking has a 'buy' rating on Bharat Dynamics.
 

Aegis Logistics, Engineers India, Hitachi Energy India, Shoppers Stop, Thermax, Solar Industries India, Cochin Shipyard and Indian Railway Finance Corporation (IRFC) are other stocks that fell into the bear grip in a month, falling 23-25 per cent each in less than a month.
 

ICICI Securities has a 'hold' rating on Shopper Stop with a target price of Rs 750, while it suggests to buy Solar Industries with a target price of Rs 13,250. HDFC Securities has a 'buy' rating on Thermax with a target price of Rs 5,104. Antique maintained its 'buy' rating on Hitachi Energy with a target price of Rs 14,164. However, Phillip Capital has a 'sell' rating on Aegis Logistics with a target price of Rs 600.

 

Jindal Stainless, Data Patterns (India), Route Mobile, The Phoenix Mills, LIC Housing Finance, Rashtriya Chemicals and Fertilizers (RCF), Computer Age Management Services (CAMS), Mazagon Dock Shipbuilders, Sunteck Realty, Hindustan Aeronautics and  UNO Minda have also fallen more than 20 per cent from their recent high scaled post-July 2024, confirming bear grip.
 

Phillip Capital has maintained a 'buy' rating on Jindal Stainless with a target price of Rs 881. Nirmal Bang has suggested to 'accumulate' Data Patterns, while Elara Capital has the same rating on LIC Housing Finance and Hindustan Aeronautics. Target prices for these counters by respective brokerages were Rs 3,124, Rs 800 and Rs 5,590, respectively.
 

Nuvama Institutional Equities downgraded CAMS to 'hold' with a target price of Rs 4,510, while Kotak Institutional Equities downgraded Phoenix Mills to 'sell' with a fair value target of Rs 2,830. Anand Rathi gave a 'hold' rating on Route Mobile with a target price of Rs 1,830.
 

New investors should do well if they stagger out the allocation over next 3-6 months and be more towards the large caps and bluechips, Gang from MoneyFront suggested. "Investors need to ride out this uncertain times by staying true to asset allocation. If markets give a correction which is over 5-7 per cent, perhaps one should look at adding more," he added.
 

 

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.