Stocks listed in FY22 hold triple-digit gains despite market corrections

Stocks : The year 2021 was an eyewash for the global financial markets as they scaled new peaks aided by low interest rate regime, abundant liquidity, supportive government policies and large-scale addition of first-time investors which thronged the markets in hordes to ride the bull run due to which more money got pumped into the markets.

History was created on the Indian bourses on October 19, 2021 when both the benchmark indices touched their all-time highs but since then the markets are witnessing a turn of fortunes and have been declining steadily. The talks of interest rate hikes, ever worsening inflation, rising crude prices were the major reasons that aided volatility in the markets and made them slip down.

The ongoing Ukraine crisis acted as a catalyst to cause bloodshed in the global markets in February. As the conflict is getting stretched by the day with no concrete signals of a truce between both the countries, the markets have become jittery and have declined more than 10 percent from their highs of October.

However, amid the widespread correction, there are certain stocks across sectors that have bucked the trend and still managed to generate handsome returns of more than 3 digits for their investors.

We take a look at seven such stocks which made their debut on the stock exchanges in FY22 and continue to garner investor interest as they trade at more than double their listing price.

Paras Defence and Space Technologies

Paras Defence and Space Technologies is one such stock which is trading with a gain of 264 percent from its issue price of Rs 175 when it launched its IPO in October 2021. The stock is able to ride the momentum generated by the government’s push for ‘Atmanirbhar Bharat’, especially in the defence space.

Experts believe that the company has strong capabilities in the area of defence electronics, defence and space optics and defence heavy engineering. Its strong customer base includes leading names from Indian space and defence sectors which provide strength to the company’s business.

That said, the civil aviation ministry on March 11 invited applications from the drone industry for the production-linked incentive (PLI) scheme which augers well for the company like Paras Defence. The Indian drone industry is expected to reach Rs 15,000 crore turnover by 2026, the Civil Aviation Minister, Jyotiraditya Scindia had said in September last year.

“With rising defence spending in India, Paras defence stands to gain but being a small company in the defence sector which has high working capital cycles and low ROE, we recommend investors to be cautious with this stocks”, said Sonam Srivastava, Founder at Wright Research.

Speciality Chemicals

The COVID induced supply chain disruptions from China created lot of bottlenecks for the sectors which use specialty chemicals in their manufacturing process.

These disruptions induced global corporations to shift towards an alternate source to China through their ‘China + 1’ strategy. India being the other major hub for specialty chemicals stands to gain a lot with the adoption of this strategy and companies like Clean Science & Technology Ltd (Clean Science) and Tatva Chintan Pharma Chem (Tatva) can be the major beneficiaries.

Clean Science & Technology Ltd

Clean Science, which launched its IPO on July 19, 2021, is trading with a gain of 122 percent from its issue price of Rs 900. “The company has a sizable competitive advantage derived from continuous flow chemistry and in-house catalysts and has an unchallenged market share in the anisole value chain”, the equity research firm Lakewater Advisors Pvt Ltd had said in its report.

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The brokerage firm JM Financial has a ‘buy’ call for the stocks with a target price of Rs 2,500 as it believes that the innovative catalytic process that the company uses in its manufacturing process is a testament to its strong R&D expertise. “This strategy gives the company high off-take visibility along with exceptional margins”.

Tatva Chintan Pharma Chem Ltd

Tatva is trading at double its issue price of Rs 1,083 on July 29, 2021. The specialty chemical company manufacturers a diverse portfolio of structure Directing Agents, Phase Transfer Catalysts, electrolyte salts for batteries, and Pharmaceutical and Agrochemical Intermediates.

“It has a diverse set of market-leading products and a good profit growth rate and ROE” said Srivastava. She however, advises caution on the stocks as revamp in production capacities in China can again put pressure on Indian companies.

Barbeque Nation Hospitality Ltd

The consumer food/QSR segment was badly impacted the lockdown and social distancing norms which were induced due to the pandemic. However, the restaurant chain of Barbeque Nation, which listed on April 02, 2021 was able to weather the storm and currently trades with a gain of 147 percent from its issue price. It maintains its focus on its core businesses of BBQ Nation, home delivery and Toscana with international business and extended kitchens acting as satellite.

The brokerage firm IIFL Securities is confident that the firm will be able to deliver EBITDA (earnings before interest, tax, depreciation and amortization) margins of 15 percent and ROE upwards of 20 percent, driven by healthy store economics. It has a ‘buy’ rating for the stock with a target price of Rs 1,800 in the next 12 months.

Sona BLW Precision Forgings Ltd

Sona BLW Precision Forgings is among India’s leading automotive technology companies, with a focus on the Driveline and Electricals (Motor) segments. It supplies these products to auto OEMs globally for application in both the Electrified/Non-Electrified Powertrain segments. It made its stock exchange debut on June 24, 2021 and is currently trading with a gain of 117 percent from its issue price of Rs 291.

“It has shown a 100 percent+ profit growth rate and consistent margins. But the stocks is enormously overvalued compared to its peers. Despite great prospects, we would remain cautious on this due to the overvaluation” said Srivastava of Wright Research.

The brokerage firm Motilal Oswal believes the current valuation have already priced in the strengths and positives for the company and it has a ‘neutral’ rating on the stock with a target price of Rs 625.

Macrotech Developers

Macrotech Developers is among the largest real estate developers in India with a presence in MMR (Mumbai Metropolitan Region) and Pune markets. It is currently trading at a premium of 113 percent to its issue price of Rs 486.

International brokerage, Jefferies believe that the company is the best play on the Mumbai residential property upturn as it builds on its market leadership. “It delivered the best pre-sales in the last 12 quarters along with 44 percent YoY growth in collections that led to Rs 400 crore reduction in net debt”, said Motilal Oswal in its report. “We retain our FY23E/FY24E pre-sales backed by strong momentum in both sales bookings and deal additions”, it added while maintaining a ‘buy’ on the stocks with a SoTP (Sum of total parts) based target price of Rs 1,700.

Latent View Analytics

Latent View Analytics has corrected 39 percent from listing despite being up 112 percent to its issue price. “This midcap software stock has one of the highest valuation post IPO among it’s peers which is why the correction after listing has been the most pronounced”, said Srivastava.

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This Data Analytics firm has a deep deal book and is consistently posting higher revenues and a 30 percent operating margin. Being a IT stocks with international exposure it has shown robustness during the crisis.

“We expect this stock to post good returns in the near future due to its strong international exposure and asset light model”, added Srivastava.