Unlike in 2008, quality and steady growth stocks are still far from being cheap, notes Sanjay Mookim. Illustration by Ajay Mohanty
The benchmark Sensex
has dropped 7,200 points, or 17.5 per cent, since February 20, 2020, the day when the global sell-off triggered by the spread of coronavirus
started. During this period, all the 30 index components have seen an erosion in their stock price. However, 10 stocks have contributed to 70 per cent of the losses. Reliance Industries, HDFC Bank, and ICICI Bank
have been the biggest drag on the index performance, given their high weightage. We analyse stocks which have made the biggest negative contribution and how their valuations compare now to their five-year average. Most of these 10 companies are now available cheaper to their historic valuations, but may not still be screaming “buy”. “Unlike in 2008, quality and steady growth stocks are still far from being cheap,” notes Sanjay Mookim, India Equity Strategist, Bank of America Merrill Lynch.