THE TIMES OF INDIA, 16 TIMES BUSINESS THURSDAY, JANUARY 1, 2015 Auto, Pharma Top Wealth Creators In 4 Years Realty, infra cos saw biggest value erosion EICHER VROOMS, MMTC GOES OFF TRACK since the 2010 highs as the economy went TOP OF THE CHARTS BEST SECTORS through a turmoil and the markets stagnated COMPANY PRICE (`) MKT CAP (`CR) NO. OF TIMES before rebounding to new peaks in 2014 Nov 5, Nov 5, Nov 5, Nov 5, CAGR (%) APPRECIATION 2010 2014 2010 2014 IN PRICE Partha Sinha & Shubham Mukherjee | TNN (Sundaram Finance and ), a 1,410 12,849 3,779 34,822 73.8 9.1 cement company (), a capital HEALTHCARE AUTO CONSUMER CEMENT TECH ust over four years ago, the Indian goods company ( India), and a Logis- Motherson Sumi 84 426 7,320 37,587 50.1 5.1 economy was cruising at a near 9% tics company (Blue Dart Express). NO OF 30 22 31 12 38 annual rate of growth and on Di- Rajat Rajgarhia, MD, institutional equi- Blue Dart 1,109 5,333 2,632 12,655 48.1 4.8 COMPANIES wali day in 2010, the sensex scaled ties, Motilal Oswal Securities, puts the find- Nov 5, J 261 1,079 2,076 9,027 42.6 4.1 2,92,7033,42,453 4,33,070 99,544 6,23,774 a new high, closing above the ings of the study in perspective. “Any time MKT CAP 2010 ` 21,000 mark for the first time ever. is the right time to buy stocks; the art lies Sundaram Fin 336 1,348 3,737 14,976 41.5 4.0 ( CR) Nov 5, 6,19,3417,16,434 9,00,673 1,94,807 11,52,695 However, since then as inflation rates in stock-picking. Even during the last four 2014 Shree Cement 2,297 9,068 8,004 31,593 41.0 3.9 spiked and interest rates spiralled, the years, when the market indices have gone MKT CAP 20.620.3 20.1 18.3 16.6 government entered a phase of pro- nowhere, numerous stocks have multiplied HCL Tech 414 1,603 28,275 1,12,447 40.3 3.9 CAGR (%) longed policy paralysis with the growth several times. On the flip side, hordes of NO. OF TIMES 261 1,002 7,594 29,202 40.0 3.8 2.122.09 2.08 1.96 1.85 nearly halving to about 4.5% within two stocks are now available at small fractions APPRECIATION years. Rupee depreciation and widening of their value four years ago,” he said. 227 870 47,112 1,80,122 39.8 3.8 current account deficit added to the In contrast to the stocks that have grown Note: In BSE 500, around 20 cos have since been replaced negativity and it has since been a phase investors’ wealth multiple times, some of Berger Paints 102 384 3,516 13,304 39.4 3.8 Real GDP Growth (%) of almost flat GDP growth with muted the worst performers have lost up to 95% SLOWING DOWN corporate performance. of their value during this period, while a Return On Equity (%) But a focused group of companies large number have witnessed around 75% Britannia 58.3 8.59 8.91 braved the headwinds and posted hand- value erosion (See ‘Bottom Of The Pile’ 41.9 some returns for anyone who had invested table). All the stocks in the list of top-20 in them, reveals a TOI-commis- wealth destroyers have erased at Torrent Pharma 39.9 BIGGEST 6.69 sioned study done by Motilal HIGH-GROWTH least 75% of their market capitali- HCL Tech 39.8 Oswal Securities (See ‘Top Of RIDE zation during the four-year period. GAINERS The Charts’ table). Significant- Some of the top laggards are Motherson Sumi 39.0 ly, most of these companies are from sectors which have been in a Aurobindo Pharma 36.7 4.47 4.74 not even leaders in the respec- secular downturn for the past few tive industries they operate in. years like power, real estate, infra- Sun Pharma 34.1 Incidentally, the sectors that structure and sugar. Companies Mindtree 30.5 created wealth such as healthcare, con- like Shree Renuka Sugars, Bajaj Hindustan, Havells India sumer, automobiles, private sector banks JP Power Ventures, etc belong to this group. 28.7 and retail are all consumer-facing. Metal companies like MMTC, Monnet Ispat Bata India 25.8 Topping the list of these outliers is Eich- and are in a cyclical er Motors, makers of Royal Enfield bikes, downturn. There’s a third group, consisting with an eye-popping stock rise of about nine of companies which got into major contro- BOTTOM OF THE PACK times in just four years. The stock rose from versies and faced regulatory scrutiny. DB FY10 FY11 FY12 FY13 FY14 COMPANY PRICE (`) MKT CAP (`CR) Rs 1,410 in early November 2010 to Rs 12,849 Realty, Financial Technologies and Bhusan NO. OF TIMES on this Diwali day. On the flip side, the big- Steel belong to the third group. Nov 5, Nov 5, Nov 5, Nov 5, PRICE CAGR (%) APPRECIATION gest loser is MMTC with a current market Eight sectors outperformed the CNX 2010 2014 2010 2014 IN PRICE IN 4 YEARS SINCE METHODOLOGY capitalization of just about 5% of the value Nifty over the four-year period: healthcare, MMTC 1,320 71 1,32,025 7,140 -51.8 0.05 four years ago. So if you had invested Rs 100 consumer, automobiles, cement, technolo- NOV 5, 2010… The objective of the study in MMTC four years ago, you would be left gy, private sector banks, retail, and textiles GTL Infra 46 3 4,417 646 -50.4 0.06 was to identify the sectors that with just Rs 5. (see ‘Best Sectors’ table). All other sectors Eicher Motors grew from a created or destroyed wealth Sh Global Trad 231 23 4,750 513 -44.1 0.10 When contacted by TOI, Siddhartha Lal, – chemicals & fertilizers, NBFCs, telecom, $854m market-cap company to during the four-year period (Nov a $5.7bn enterprise MD & CEO, Eicher Motors, credited his oil & gas, capital goods, media, public sector Opto Circuits 233 23 5,559 560 -43.9 0.10 5, 2010 to Nov 5, 2014) performance to a differentiated product of- banks, utilities, metals, real estate, and mis- 8 sectors outperformed the Nov 5, 2010 was chosen as the fering, providing a seamless chain between cellaneous – underperformed. A total of 12 Guj NRE Coke 64 7 3,467 521 -41.8 0.11 | Healthcare, consumer, Nifty starting date for our analysis, as production to retail and an unrelenting sectors – healthcare, consumer, automo- automobiles, cement, Lanco Infratech 64 8 15,422 1,835 -41.3 0.12 on this day the sensex scaled its focus on the two product lines – motorcycles biles, cement, technology, private sector technology, private sector and commercial vehicles. “We are commit- banks, retail, textiles, chemicals & fertiliz- IVRCL 157 20 4,188 603 -40.5 0.13 last closing peak before going banks, retail, and textiles into a nearly 3-year hiatus ted to the investor community and our long- ers, NBFCs, telecom, and oil & gas delivered 623 86 3,256 566 -39.1 0.14 term focus may have added to this (perform- positive returns. Seven sectors – capital Monnet Ispat 12 sectors gave positive To arrive at our top-20 returns | Healthcare, consumer, ance),” he said. goods, media, public sector banks, utilities, DB Realty 424 70 10,308 1,704 -36.2 0.17 lists, within the BSE-500, we automobiles, cement, Six of the top-20 wealth creators – Eicher metals, real estate, and miscellaneous – de- restricted our choice to the technology, private Motors, Motherson Sumi, TVS Motor, MRF, livered negative returns. The performance Gitanjali Gems 346 59 2,912 576 -35.8 0.17 companies that had a minimum Wabco India and – belong to of the technology and healthcare sectors sector banks, retail, textiles, SpiceJet market capitalization of Rs 2,000 automobiles. Consumer (Berger Paints, Bata has been favourably impacted by a weaken- GTL Infra chemicals & fertilizers, crore as of Nov 2010 and Rs 500 India and Britannia), healthcare (Aurobindo ing rupee. Most of the sectors that destroyed Guj NRE Coke Sh Renuka Sugar NBFCs, telecom, and oil & gas crore as of November 2014. wealth including real estate, metals, utili- NO RETURN Pharma, Sun Pharma and Torrent Pharma), Lanco Infratech Bajaj Hindusthan Tech and healthcare gained and technology (Mindtree, HCL Technolo- ties, infrastructure, public sector banks, Capitaline database was used majorly from a weakening gies and Tech Mahindra) have contributed and capital goods – are deeply cyclical and ON EQUITY IVRCL Hindustan Oil for the study rupee against the dollar three companies each to the top-20 wealth were affected by policy paralysis during the Financial Tech Triven Engg Source: Motilal Oswal Securities creators’ list. Besides, there are two NBFCs UPA-2 regime.