Generating an extra return over the benchmark, known as alpha in market parlance, is the foremost objective of any investor on Dalal Street.
Data shows investors who added stocks from Nifty Alpha 50 index last year are sitting on gains despite the recent correction in the domestic equity market.
As much as 90 per cent of the stocks in the index delivered positive returns to investors with Rain Industries soaring 308 per cent to Rs 362 on March 1, 2018 from Rs 88.65 on the same day last year.
Value investor Dolly Khanna holds more than 2.50 per cent stake in the company, while Mohnish Pabrai’s funds Pabrai Investment Fund 3 and The Pabrai Investment Fund II holds 4.83 per cent and 3.79 per cent, respectively, in the company.
Brokerage firm Motilal Oswal has ‘Buy’ on Rain Industries with a target price of Rs 480, indicating an upside of over 30 per cent from present levels.
Multibagger Avanti Feeds came next in the list. It soared 259 per cent to Rs 2,431.55 from Rs 676.90 in the last one year.
The company is principally engaged in manufacturing of prawn and fish feeds and shrimp processor.
For the latest quarter ended December 31, 2017, Avanti Feeds reported an impressive 98 per cent year-on-year rise in net profit at Rs 100.52 crore against Rs 50.83 crore in the corresponding quarter last year.
Continued healthy demand for shrimp feeds and processed shrimps supported bottomline of Avanti Feeds in Q3FY18.
Religare Broking said, “Avanti Feeds remains a preferred pick in the aquaculture industry given new capacity addition and robust outlook for demand. We recommend a ‘Buy’ on the stock for a target of Rs 2,980.”
Indiabulls Real Estate, Delta Corp, Future Consumer, Adani Enterprises and Jubilant Food also more than doubled investors wealth during March 1, 2017 and March 1, 2018.
Indiabulls Real Estate will be seeking its shareholders’ nod for divesting stake in its commercial leasing business and assets in Chennai on March 23, the company said in a regulatory filing.
Brokerage firm Nirmal Bang Securities has ‘Buy’ recommendation on the quick service restaurant Jubilant Food with a target price of Rs 2,620.
“We believe that pizza, as a category, has great potential in India. With improvement in macro-economic and consumer sentiment, undoubtedly, Domino’s Pizza, the market leader with close to 70 per cent market share, will be the largest beneficiary of this business opportunity,” the brokerage house said.
Other stocks that delivered decent return from the index in the past one year included Edelweiss Financial Services (up 99 per cent), Jindal Steel and Power (up 97 per cent), Escorts (up 92 per cent), Tata Global Beverages (up 91 per cent), Titan Company (up 85 per cent), PC Jeweller (up 78 per cent) and JM Financial (up 72 per cent).
Jindal Steel and Titan Company are among the preferred picks of Motilal Oswal. However, the brokerage firm has ‘Sell’ rating on Escorts with a target price of Rs 714.
Brokerage firm ICICIdirect.com is positive on Tata Global Beverages with a target price of Rs 300.
“Tata Global has consistently expanded its market share in the Indian and international tea market led by its strong brands (domestically, Tata Tea, Tata Tea Gold, Agni and Kanan Devan and internationally through Tetley). We estimate the tea, coffee and other non branded business’ revenue will grow at a CAGR of 5 per cent, 3.7 per cent and 6.3 per cent, respectively, in FY17-20E. Thus, we estimate consolidated sales will grow moderately at a CAGR of 5.3 per cent in FY17-20E to Rs 7,917 crore in FY20E. Further, we expect the performance of JVs to consolidate and result in operating profitability, going forward,” ICICIdirect.com in a report.
On the other hand, Vakrangee, India Cements, BEML, NHPC and Bank of India dipped 2 per cent, 7 per cent, 7 per cent, 9 per cent and 12 per cent, over the past 12 months.
The benchmark NSE Nifty index has climbed 17 per cent in the past one year. The index has jumped to 10,458.35 on March 1, 2018 from 8,945.80 on March 1, 2017. However, Nifty 50 index has slipped 6.40 per cent from its recent all-time high of 11,171.55 which it scaled on January 29, 2018.