For stock market investing it is said that you can build a good corpus amount by remaining invested in them for a longer life span but likewise there can be erosion also of your wealth if the fundamentals and the various other factors around the scrip/stock and industry at large are not in favour.
Here we will discuss 3 such stocks that have eroded investors’ wealth by a great deal and brokerage calls on them:
1. Reliance Infrastructure:
This is an Anil Dhirubai Ambani Group company, the company is primarily engaged in infra development and its core sectors include energy, infrastructure, E&C and defence. The company’s turnover as per the company website is Rs. 18,852 crore.
The company bagged ‘Best Metro of India 2016’ Award for having developed a marvel in Mumbai Metro one.
Stock price journey of Reliance Infra:
The company stock as in 2018 registered an all time high of Rs. 2641 and the last traded stock price of Reliance Infra is Rs. 76.85 per share, while its 52-week high and low are Rs. 109 and Rs. 19.2, respectively. The stock is part of the S&P BSe Small cap stock and is categorized in the ‘T’ category.
What weighed on Reliance Infrastructure stock?
For the last quarter of FY19, the company posted a huge loss of over Rs. 3000 crore and since then the stock has come crashing down. Now even as the group’s companies’ are under NCLT resolution there is a belief that recovery shall be much higher than what is owed to creditors and this is creating fresh interest for the stock.
As of now, regarding the company’s financials, its debt to equity is well below 1 i.e. a big positive, also the debtors turnover ratio is the highest at 4.6 times.
2. PC Jeweller:
It is the finest jewellery discovery platform offering a widest collection of curated designs to fit every occasion. The company takes pride in its policies that provide easy returns, free shipping, BIS Hallmark, 100% certified jewellery, life-time exchange, best and transparent prices and unique designs all under one roof.
Stock price journey
The jewellery company made its Indian stock market debut in the year 2012 and its price was fixed at Rs. 135 per share. The stock in the year 2018 made an all time high price of Rs. 600 and was last at July 20, 2021 quoted at a price of Rs. 26.40.
There were 2 concerns seen at the company then which led to a drag in its share price first there was a speculation made that the company’s promoters might have hidden information on its business association with Vakrangee. Also, one of the promoter in the company gifted his stake in the company to family members via off market transactions.
Latest financials and other metrics
For the June ended quarter the number of FIIs/FPIs in both number and % terms have increased their holding in the scrip, indicating positive momentum. The firm for the quarter ended March of FY21 posted positive financial results and for the complete financial year 2021, Profit figure came in at Rs. 60.84 crore. Another has been positive growth in PBT less OI of 186%.
3. Yes Bank:
Yes Bank was among the leading private sector bank in the country in existence since the year 2004. The commercial bank is into offering a host of services including investment banking, merchant banking & Brokerage businesses through YES SECURITIES and its Mutual Fund business through YES Asset Management (India) Limited, both wholly owned subsidiaries of the Bank.
What played havoc for Yes Bank scrip?
In mid 2019, Yes Bank scrip saw a lot of downgrades and even Moody’s placed private lender’s foreign currency issuer rating of Ba1 under review for downgrade. And from an all time high reached in Yes Bank’s scrip of Rs. 404 in 2018 again, the stock came tumbling down to Rs. 12.95 per share as of last trade.
Primarily the Moody’s note indicated that the liquidity pressure on the domestic finance firms is expected to impact the credit profile of YES Bank since it has substantial exposure to the weaker firms in the sector.
But later the crisis-ridden lender was rescued by RBI’s action plan and SBI led the bank’s recovery with a number of other banks taking the charge. Even after the recovery plan in place, the bank’s scrip didn’t saw much revival and it is substantially down from its all time high.
Yes Bank’s 52-week high and 52-week low price has been Rs. 20.75 and Rs. 11.1, respectively.
Financials still weak for the lender
– Net profit is -Rs. 3787.75 crore has fallen at 244%.
– NII is the lowest at Rs.968 crore
– Credit deposit ratio is also lowest at 102%
4. Vodafone Idea:
The telecom provider is an Aditya Birla Group and Vodafone Group entity offering a host of voice and data services across 2G, 3G and 4G solutions. The company is contributing immensely to the nation’s Digital India mission.
Stock market journey of Vodafone Idea shares
Vodafone Idea made its listing on the bourses in 2007 at a issue price fixed between Rs. 65- 75 and the stock hit its all time high of Rs. 123 in 2015 but now as of last trade as on July 20, 2021 settled at a price of Rs. 9 per share on the NSE. The stock’s 52 week low and high are Rs. 8.9 and Rs. 9.35.
Financials weak yet fund managers bet on this cash-starved telecom provider
For the March ended quarter of FY21, the firm’s loss expanded to more than Rs. 7000 crore. Nonetheless, despite precarious financials, mutual funds with the highest asset base such as HDFC AMC and Aditya Birla have bet on the stock and added the Vodafone Idea in their kitty. In fact some other mutual funds have betted on the stock, implying mutual fund’s positive outlook on the stock.
Positives seen for the scrip
The company is gearing to raise funds and is in talks with investors to keep the firm as a going concern.
Rising net cash flow and cash from its operations
So, as we have seen these scrips crashing down heavily from their all time highs, investors need to time to time evaluate their portfolio and get out of such stocks and hence this is where portfolio rebalancing comes to play.