These BSE 500 stocks tanked over 50% from 52-week highs; should you buy now?

Sometimes correction in the equity market brings an opportunity for investors to lap up their favourite stocks at attractive valuations. Data shows that at least 19 stocks in the BSE 500 index have cracked more than 50 per cent from their respective 52-week highs amid the ongoing consolidation on Dalal Street.

The benchmark BSE Sensex has declined 11 per cent 55,102.68 on February 3, 2022 against its 52-week high of 62,245.43, scaled on October 19, 2021. Likewise, broader indices including BSE 500, BSE Midcap and BSE Smallcap have lost somewhere between 12 per cent-15 per cent so far from their respective 52-week high levels.

With a fall of 67 per cent, Strides Pharma Science topped the list of major losers in the BSE 500 index. Shares of the company have declined to Rs 308.75 on March 3, 2022 from its 52-week high of Rs 946.80, which hit on April 23, 2021. Dilip Buildcon, Tata Teleservices (Maharashtra), Solara Active Pharma Sciences, Vaibhav Global and Sequent Scientific have plunged between 60 per cent and 65 per cent amid the ongoing sell-off.

According to market watchers, the conflict between Russia and Ukraine, heavy selling by foreign institutional investors and rising concern over inflation mainly dragged the Indian equity markets in the recent past.

VK Vijayakumar, chief investment strategist, Geojit Financial Services said, “The war (between Russia and Ukraine) and rise in crude oil prices have completely transformed the economic scenario and market expectations. If the war prolongs global economic growth may be impacted. In India, both the government and RBI had assumed crude price of around $75 and, therefore, projections in the budget and monetary policy have to be revised materially.”

He further added that even if crude price declines and stays around $100, inflation for FY23 will be much higher than RBI’s forecast. Therefore, the monetary policy committee (MPC) will be forced to raise rates and this will impact the economic recovery underway.

“Even in a declining market there will be safe spots like IT, metals and high-quality stocks which will not be impacted by rising inflation and higher interest rates,” Vijayakumar said.

Data further highlighted that players, including HEG, Wockhardt, Spandana Sphoorty Financial, PNB Housing Finance, Ujjivan Small Finance Bank, Jubilant Pharmova, IndiaMart InterMesh, General Insurance Corporation of India, Vakrangee, IOL Chemicals and Pharmaceuticals, Indiabulls Housing Finance, Hikal and Lux Industries have also retreated between 50 per cent and 60 per cent so far from their respective 52-week high levels.

For stock-specific investors, Aditya Birla Capital suggested stocks like GNFC, Infosys, MCX, Phoenix Mills and Varun Beverages to buy considering the present market condition.

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