DSIJ Stock Recommendations Review

Since Feb 2018, the market has been moving sideways with more negative bias. The volumes have declined and so has the investor activity. 

Since Jan 2018, the Sensex has been volatile, swinging from the high of 36,283 on Jan 29 to the low of 32,596 level by March 23. Though the Sensex recovered from that level to the 35,421 level by June 15, the stocks that bled the most and did not see the same level of recovery were the small and mid-cap stocks. The BSE Small-cap index has shed 1,755 points since January, while the Mid-cap index has dropped by 1,363 points. 

The BSE turnover in the last 54 trading days has declined as compared to FY18. This indicates restraint from the investors till the market cues are firmly pointing towards a sustained bull run. 

We analysed a set of companies with market cap between Rs 200 corer to Rs 1,000 crore to find that these companies have corrected on an average by 13% and on a median basis by 22%. Looking at companies with market cap of more than Rs 1,000 crore to less than Rs 10,000 crore, we see that the average correction was 11%, while the median was 15% over the period from Jan 1 to June 15. 

The market volatility, coupled with external macro factors led to the correction in stocks recommended by us. We have picked up stocks recommended over the last one year which have seen correction and would like to provide insight on the same.