Large caps back in action

Post the upgrade by Moodys rating for India from Baa3 to Baa2, the market are back in action and bulls started outpacing bears. We see that in this rally the market went stock specific and rewarded companies for their quarterly results or restructuring. We looked into companies with market cap greater than Rs.10,000cr and which have gained the most over the last week and month. Notably, the companies which recorded highest gains have P/Es in high double digits.

Future retail (FRL) registered highest weekly return of 22.5% driven by the demerger of Home retail segment. FRL has been looking for sometime to demerger Home retail segment and focus on Easyday format. Kishore Biyani’s vision of making FRL a trillion dollar company by FY47 provided a long term view to the investors. Similarly, Quess corp gained by 12.9% on the news of acquiring stake in Tata Business support services for Rs.153cr.

Apollo hospital’s share price spiked in anticipation of better performance on EBITDA line and better metrics for the matured hostpital. On QoQ basis, some recovery was seen in net profit however on Yoy basis the results lacked luster. Also, the license cancellation for kidney transplant in Delhi might lead to correction going forward.

From the power sector Tata power and Adani power both benefitted from orders received and expected growth driven by the same. Tata power Israeli arm received order from Indian Navy while Adani power grabbed power supply agreement from Bangladesh.

We see that quarterly results and news driven upside movement is also seeing profit booking in some stocks. Hopefully investors benefitted from the windfall gains.