How the biggest winners of 2021 have fared in 2022 so far
In 2021, Indian stock markets (and stock markets around the world) surged, thanks to easy liquidity.
In October 2021, India’s benchmark BSE Sensex reached its all-time high at 62,245. Sensex’s all-time high was short-lived and it quickly collapsed.
As things stand, the markets do not paint a clear picture. 2022 has had a lot of ups and downs. One day the markets are up 1% while the next day it’s down like there’s no tomorrow.
Clearly, 2022 has been a big disappointment for investors. The Sensex is down 10% this year.
In 2021, almost all stocks have seen a strong rally. But what has happened to these stocks in 2022 so far?
Are those multibagger stocks always on top? Or are they at a steep loss this year? Read on to find out the current performances of the top artists of 2021.
#1 Brightcom Group
Buying shares of Brightcom Group in 2021 was like farming money.
The stock recorded a growth of 2,518% in 2021, rising from Rs 4.1 to Rs 107.4. This means that if you had invested Rs 1 lakh in Brightcom Group shares, the same would have turned into just over Rs 26 lakh in just one year.
The rise in shares of Brightcom Group can be linked to the company’s good financial performance, a plethora of favorable events and business expansion.
Business performance has improved with the increased use of digital media and digital channels to trade across the globe.
Mid-2021, the company issued bonus shares to shareholders. The bonus share ratio was 1:4, or one share for every four shares held.
The company was also repaying its debt. At the end of 2021, Brightcom Group was a debt-free company. A debt-free business is considered relatively safe to invest in.
In 2021, Brightcom Group issued new shares worth Rs 5,300 million to overseas and other investors. It also issued equity warrants amounting to Rs 15 million to ace investor Shankar Sharma. These warrants could be converted into shares of the same amount.
Brightcom Group had therefore taken steps to increase the market capitalization in 2021. For all these reasons, the share price surged.
However, in 2022, the stock is in a downtrend. In March 2022, the share price fell to Rs 55.7 from Rs 100. That’s a drop of 40% so far this year.
One of the reasons for the fall is the issuance of free shares. With each issue of free shares, the share price falls in proportion to the free share ratio. Recently, it issued bonus shares at a ratio of 2:3, or two new shares for every three shares held.
Brightcom Group’s business is divided into three segments: Media (Ad-Tech and Digital Marketing), Software Services and Future Technologies. Much of the business is in software services.
Indian IT stocks fell in 2022. The reason for this is the fall of the Nasdaq in the United States.
#2 Tata Teleservices (Maharashtra) (TTSM)
Throughout 2021, Tata Teleservices’ share price has rallied and never looked back.
It grew by 2,497% in 2021. This means that if you had invested Rs 1 lakh in TTSM, you would have made a gain of Rs 2,497,000 in just one year.
Interestingly, TTSM is knee deep in losses. It has only made profits for two quarters out of the last 82 quarters.
Its current liabilities are more than its current assets. The company is heavily indebted. All of these signs are against the business. So why did the stock price rise in 2021?
No matter how bad a child is, a family never abandons him. The same thing happened with TTSM. When TTSM faced illiquidity, it got a letter of support from Tata Sons. Tata Sons has injected a lot of funds.
A turnaround strategy is being implemented for TTSM. He is relaunched in a new avatar called Tata Tele Business Services (TTBS).
TTBS has launched a cloud-based communication platform called Smart Flo.
Because of this, Tata Teleservices’ share price skyrocketed. It hit an all-time high of 290.2 on January 11, 2022.
At present, the shares of the company are trading at Rs 131.5. This translates to a 37% loss in 2022 so far.
However, the shares did not experience a continuous decline in 2022. They went down as far as Rs 93.6 on March 8, 2022, but started rising after that.
TTSM stocks rose too much in 2021. So a correction was in order.
On January 10, 2022, TTSM announced its intention to issue shares to cover interest on its AGR dues.
#3 GRM abroad
As the rice fields are covered with water, investors of this rice stock have been loaded with huge profits in 2021.
GRM Overseas shares showed a growth of 1,656% in 2021. This means that if you had invested Rs 1 lakh at the start of 2021, you have made a gain of Rs 16.5 lakh in just one year.
The strong recovery is the result of strong fiscal 2021 financial results. In the quarter ending December 2021, the company saw a 350% increase in net income and 39% year-over-year sales.
Its annual profit increased by 43.3% in the 2020-21 financial year compared to the profit of the previous year.
The business is growing slowly. It plans to expand its operations globally. The company has already launched its own branded products in Europe.
Due to its outstanding growth and future growth prospects, GRM Overseas shares rallied.
The upward trend was even seen in early 2022. It reached its 52-week high on January 20, 2022 at Rs 935.4.
On January 10, the company announced that its subsidiary’s brand of rice would be available on Udaan. Udaan is the B2B trading platform designed for traders, wholesalers, retailers and manufacturers.
At that time, stock markets were experiencing volatility. As a result, GRM Overseas stock also started to correct.
At present, the GRM Overseas share price is trading at Rs 369.5. It has fallen by 42% in 2022.
#4 3I Infotech
3I Infotech is a medium-sized IT company. The company’s shares were temporarily delisted on August 30, 2021. The delisting was done to allow for the implementation of a debt restructuring plan.
As part of the debt restructuring programme, the nominal value of the company’s shares was reduced from Rs 10 to Re 1. Thus, there was a 90% capital reduction in the company.
In 2021, the company released big statements like its goal to introduce 5G network, be a one-stop technology solution company, become a debt-free company, etc.
3I Infotech became a debt-free company by selling one of its subsidiaries.
For the above reasons, the shares started to climb after they re-listed. The shares were relisted on October 22, 2022. By the end of the year, the share price had jumped 1,353% from the 2020 year-end price.
However, the price rise was based on easy liquidity and optimistic statements made by the company. Therefore, when the effect of these statements began to wear off, the stock price began to decline.
The stock experienced a sharp decline on December 17, 2021. After that, it fell at a rapid rate.
IT stocks were hammered globally. Declining profit margins and high attrition rates have caused stock prices to fall rapidly. 3I Infotech is no exception to the rule. It has fallen 46% since the start of 2022.
Top performers of 2021 and how they’re doing in 2022 so far…
Here is the list of top 10 artists of 2021 and their performances in 2022 so far.
The stock market is an expensive place to learn how to invest. The market first takes your money away, then teaches you a lesson.
This was the story of top winners of 2021. Stocks that benefited from easy money crashed.
Surely, more stocks will fall this year compared to last year.
As we have already written, 2022 will be a difficult year for investors. There is a higher chance of losing money over the next few months compared to any period since March 2020.
And that’s exactly what happened. Currently, the markets are extremely volatile. You must therefore be extremely careful in choosing the best stocks to invest.
Here’s what Equitymaster Co-Head of Research Tanushree Banerjee has to say about stock picking…
Profits here will not be easy money. You will need to select your actions carefully, assess the risks, insist on a margin of safety and make timely exits.
The reason I say this is that the trend of too much money for too few good deeds is reversing. The cycle of rising interest rates could now reverse the direction of global fund flows.
Moreover, the post-pandemic recovery is well factored into earnings projections and stock market valuations.
So from now on, I think the recovery in earnings could only be disproportionate in rare economic circumstances.
Remember that opportunity can be found in any adversity. Therefore, you can take advantage of the current environment if you invest prudently.
Now, if you are considering investing, aim to invest for the long term to reap maximum benefits.
Disclaimer: This article is provided for informational purposes only. This is not a stock recommendation and should not be treated as such.
This article is syndicated from equitymaster.com
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)