The bulls came out in full force on Dalal Street in 2017, lifting benchmark equity indices Sensex and Nifty over 25 per cent each.
As a result, over 450 stocks from across sectors soared more than 100 per cent on BSE in last 12 months. That, when you leave out the penny stocks, some of which logged stupendous gains.
Graphite electrode manufacturer HEG stood out as the biggest wealth creator of 2017 on Dalal Street, with 1,381 per cent rise from Rs 150 on December 30 last year to Rs 2,221 on December 28, 2017.
This means, an investment of Rs 10,000 in HEG on December 30, 2016 would have become nearly Rs 1.50 lakh today. Fortunes of the graphite electrode sector have witnessed sudden change as spot prices of graphite electrodes registered a significant rise over the past few months.
The key triggers have been consolidation of the graphite electrode market globally, shutdown of around 20 per cent of global graphite electrode capacity (excluding China) in last three years, an increase in steel production through the EAF route (outside China) and an increase in steel prices in global markets.
Closure of steel capacity in China has also led to a decline in both steel and graphite electrode exports from the region.
Other names on the list big wealth creators on Dalal Street include Indiabulls Ventures (up 1,180 per cent), SORIL Holdings (up 1,020 per cent), Graphite India (up 830 per cent, Weizmann Forex (up 733 per cent) and Bhansali Engineering (up 732 per cent).
Among others, shares of Goa Carbon, Yuken India, Frontier Springs, Goldstone Infratech, Mohota Industries, Rain Industries, Jindal Worldwide and Venky’s India have advanced between 550 per cent and 720 per cent since December 30 last year.
Kotak Securities is betting on Venky’s (India), which it feels is confident of medium-term direction of earnings growth, and is committed to maintaining a zero-debt capital structure, which will enhance investor confidence.
The BSE Sensex advanced 27 per cent to 33,848 on December 29, 2017 from 26,626 on December 30, 2017.
A couple of factors supported the benchmark equity indices in 2017, including back-to-back wins for the BJP in key states, including India’s most populous state Uttar Pradesh and Prime Minister Modi’s home state Gujarat.
India’s sovereign rating upgrade by Moody’s Investors Service for the first time since 2004 and robust liquidity further supported the market.
The Sensex can go up to 34,500 and Nifty50 can touch 10,800 levels by the end of December next year, says Kunj Bansal, ED & CIO, Centrum Wealth Management.
With the expectation that the worst is over on the NPA front in the BFSI (banking, financial services and insurance) space, execution and capex cycles are expected to improve in the infrastructure and EPC sectors and growing demand for consumer goods should help improve market sentiment from here on, Bansal said.
Some analysts have modest expectations. “We feel returns coming from the Sensex and Nifty will be far subdued compared with what they delivered in 2017,” says Rakesh Tarway, Head of Research at Reliance Securities.