Nifty’s 8 most depressed stocks drop up to 40% from 52-week highs. Should you buy them?

New Delhi: Bluechip barometers BSE Sensex and Nifty50 have dropped sharply, registering double-digit cuts from their peaks hit in October 2021. However, some of the counters have taken a bigger hit.

Eight of the most distressed bluechips stocks have plunged more than one third from their respective heights. Majority of these battered stocks are from healthcare, IT, infra and metal sectors.

However, market analysts remain majorly positive on these stocks and see an up to 70 per cent upside in these stocks, with most of them having a buy rating on them.

Among the latest entrants on Nifty50, , has topped among the wealth destroyers on the index. It has tanked more than 39 per cent to Rs 3,568.5 from its 52-week highs of Rs 5,930.7 scaled in November 2021.

Apollo Hospitals reported a 46 per cent year-on-year decline in net profit to Rs 90 crore in Q4FY22 due to provision for capital gains tax of Rs 88.2 crore relating to the reorganisation of its pharmacy distribution business.

Elara Capital has reiterated a ‘buy’ on the stock but has slashed its target price to Rs 5,125. “Higher occupancy and specialized surgeries at mature & new facilities and addition of new pharmacy stores are expected to boost growth,” it said.

IT majors including and have dropped 38 per cent and 36 per cent, respectively, from their respective 52-week highs, due to muted demand and margin pressures on these companies.

Global financial brokerage Macquarie has upgraded Wipro from ‘neutral’ to ‘overweight’ and also raised the target price to Rs 660 from Rs 630. Credit Suisse maintained its neutral rating on the IT stock with a target price of Rs 530 per share.

Tech Mahindra is well positioned to sustain growth momentum in FY23 due to strong deal TCV run-rate, robust growth in FY22 order book and better placed to capture strong demand in the communication segment, said brokerage Prabhudas Lilladher.

“Weak exit margins and headwinds from higher manpower costs, amortization charge, return of travel and facility costs will weigh down margins and EPS in FY23,” it added with a buy rating and a target price of Rs 1,426 on the counter.

has tumbled 36 per cent from its recent high of Rs 636 scaled by the end of FY22, thanks to negative sentiments around metal companies. However, brokerages see the counter scaling new peaks after Q4 numbers.
reported doubling of consolidated profit at Rs 3,851 crore in the March quarter, a record high for any quarter, compared with Rs 1,928 crore in the same quarter last year.

Global brokerage firm CLSA maintained a buy rating with a target price of Rs 580 per share. It feels that the results were on expected lines, but all headwinds have been priced in at current levels.

Macquarie too maintained an outperform rating with a target price of Rs 689, while Credit Suisse sees a target price of Rs 640 per share. It also retained its outperform rating on the Aditya Birla Group’s stock.

Bluechip drug maker Divi’s Labs has also dropped about 36 per cent from its latest peak despite the pharmaceutical company delivering a better-than-expected March quarter 2022 results.

“While there are apparent near-term concerns, long-term growth levers are intact,” said Sharekhan. “We maintain a Buy recommendation on the stock with a revised target of Rs 4,900.”

Amid the overhang of divestment by the government, Bharat Petroleum Corporation (

) has dropped 35 per cent from its 52-week high of Rs 503 in September 2021 to Rs 328.1 on June 3.

The government recently withdrew its offer to sell its entire 53 cent stake in BPCL, citing that majority of bidders have expressed their inability to participate in the current privatisation process due to prevailing conditions in the global energy market.

“While the current scenario is weak with negative auto-fuel margins, we maintain Buy owing to reasonable valuations and expectations of a gradual recovery in margins to normative levels,” said Emkay Global with a target price of Rs 415.

and are other stocks which have dropped more than 34 per cent from their 52-week highs.

ICICIDirect Research has maintained a buy rating on Bajaj Finserv but has revised its target to Rs 18,900 from Rs 20,000 given a pick-up in finance business and anticipated healthy growth in insurance segment.

According to a report from

, is likely to replace Shree Cement in Nifty50 pack in the upcoming semi-annual index review with effect from September 30, 2022.

Swiss brokerage firm Julius Baer has suggested investors to hold Shree Cement, with a target price of Rs 25,500, which was Rs 28,100 earlier.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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