These BSE 500 stocks doubled money in 2021; what's next?

Equity investors have managed to create humungous wealth on Dalal Street in 2021. On a year-to-date (YTD) basis, the benchmark BSE Sensex has gained 20 per cent to 57,313 till December 23. On the other hand, broader indices, the BSE Midcap and BSE Smallcap, have advanced 37 per cent and 58 per cent, respectively, during the same period.

 Data shows some 70 stocks in the BSE 500 index have also advanced over 100 per cent YTD. With a rally of 1,839 per cent, Tata Teleservices (Maharashtra) emerged as the top gainer in the list. It was followed by Trident (up 438 per cent), Poonawalla Fincorp (up 405 per cent) and Adani Total Gas (up 366 per cent).

Brokerage Ventura Securities is positive on Adani Total Gas with a target price of Rs 2,012. "Despite this outperformance, we believe that there exists significant room for further upside. We expect Adani Total Gas' gas volumes to grow at a CAGR of 41.3 per cent to 1,451 mmscm over FY21-24E, while its revenue, Ebitda and net profit are expected to record an annualised growth of 45.6 per cent, 34.1 per cent and 38.7 per cent, respectively," the brokerage said.

In general, a couple of factors such as persistent buying by the foreign and domestic institutions, liquidity and improving macros supported sentiment in 2021. On the flip side, the identification of the Omicron variant in late November, and the market's strong immediate reaction to it, was a stark reminder that the novel coronavirus is a persistent risk.

Meanwhile, Central banks are now making strategic moves away from emergency measures and policy rates. However, at home, the Reserve Bank of India (RBI) has continued with the accommodative stance to restrain borrowing costs rising in the near future.

Despite the recent choppiness, players like JSW Energy, Adani Transmission, Gujarat Fluorochemicals, Happiest Minds, KPIT Technologies, Adani Enterprises, KPR Mill, Angel One, Balaji Amines, Indian Energy Exchange, Hikal, Persistent Systems and HFCL have gained between 200 per cent and 300 per cent in 2021 so far.

Commenting on the equity markets, Neeraj Chadawar, head-quantitative equity research, Axis Securities said, "Considering the strong earnings trajectory, we maintain our December 2022 Nifty target of 20,200, valuing it at 22 times FY24E earnings. The performance in the broader market is likely to continue in 2022, led by a strong earnings trajectory. However, the performance margin between large and midcaps are likely to reduce in 2022."

Tata Elxsi, Indian Railway Catering and Tourism, Minda Industries, Max Healthcare, Tata Power Company, Allcargo Logistics, Tanla Platform, Mindtree, Praj Industries, Mastek, eClerx Services, Radico Khaitan, Tata Motors, TCI Express and Century Plyboards (India) stood among other players in the list which gained between 150 per cent and 200 per cent YTD.

AK Prabhakar of IDBI Capital Markets is positive on Tata Power. "We believe that the stock has potential to double in the next 2-3 years," he said.

Going ahead, SMC Global Securities is positive on stocks like Reliance Industries (RIL), Infosys, ICICI Bank, State Bank of India, HCL Technologies, Larsen and Toubro, Sun Pharmaceutical, DLF, Siemens, Gland Pharma and Prestige Estates with a potential upside of up to 28 per cent.

Other companies from across the sectors including Prince Pipes, Deepak Fertilisers, APL Apollo Tubes, Lux Industries, IIFL Finance, Linde India, DCM Shriram, Deepak Nitrite, Solar Industries, Bajaj Electricals, SKF India and Century Textiles and Industries have also rallied over 100 per cent in 2021 till date.

Pradeep Gupta, co-founder and vice chairman, Anand Rathi Group said, "We prefer infrastructure, construction, capital goods, cement, building materials for 2022. We are also positive on IT-tech given that under the post-pandemic new normal, the earnings growth trajectory of most of these companies would be better than the pre-pandemic averages."

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