Budget made 80% stocks bleed, but remaining 20% on cloud nine, rallying up to 75%

The Union Budget 2019, tabled on July 5, may have become a sore point for investors on Dalal Street, as it reflected in the 4 per cent drop in the benchmark Sensex ever since.

As many as 80 per cent of BSE-listed stocks eroded investors’ wealth in the 11 sessions till July 19. But the remaining 20 per cent had a field day through this period, advancing up to 75 per cent.

Data showed the winners on the list came from the chemicals, real estate, consumer food, engineering, IT, pharma and even the battered NBFC sector. There are also a few agri-linked stocks in time of farm distress and delayed monsoon.

Seven stocks on the list rallied in excess of 50 per cent during this period, with IT consulting firm Vama Industries gaining the most at 76 per cent and textile and apparel maker Mandhana Industries coming a close second with 69.70 per cent gain. Besides, there were industrial gas producer National Oxygen, cable TV operator GTPL HathwayNSE -0.45 %, infra developer Supreme InfrastructureNSE -4.93 %, vegetable oil producer JVL Agro and ITeS provider Asya Infosoft, whose shares climbed between 50 and 70 per cent.

Among others, Artefact Projects, Mercator, Parsvnath DevelopersNSE -4.71 %, Lee & Nee Softwares, STL Global, Overseas Synthetics and Celestial Biolabs gained over 35 per cent.

With up to 32 per cent rally, Gelatine Products, Span Divergent, Polylink Polymers, Kesar Petroproducts, Titan Bio-Tech, Vasudhara Rasayans emerged among other top grossers from the chemicals space.

The chemicals sector has been reaping the benefits of a clampdown on chemicals manufacturing in China over the past three years and uncertainty that China’s tighter pollution norms may pose a risk to the sector.

Eldeco Housing and PVV Infra gained more than 10 per cent during this period in an otherwise depressing real estate canvas. From the pharma space, Mangalam Drugs & Organics, Bafna Pharma, Nutraplus India and Syschem have gained 15 per cent since Budget.

NBFC players Can Fin Homes, Religare Investcorp, Pioneer Investcorp, BF Investment and Regency Investment and mutual fund entities Reliance Nippon AMC, HDFC AMC have gained up to 23 per cent.

The Budget paved the way for RBI to undertake corporate restructuring of the NBFCs and housing finance companies in public interest. This could enable the central to act upon specified entities, enabling ring fencing to insulate from any spillover risk, says India Ratings and Research.

India Inc had high expectations from the first Union Budget of Modi 2.0 presented by Finance Minister Nirmala Sitharaman.

With its key focus on infrastructure, affordable housing, startups, education, finance and agriculture, the Budget tried to set a vision for growth in the economy.

But, the Budget proposal to levy a surcharge in the high income tax brackets, that also include 40 per cent of FPIs investing in India, hurt market sentiments.

As a result, market capitalisation of BSE-listed firms declined by Rs 8.24 lakh crore to Rs 145.34 lakh crore on July 19 from Rs 153.58 lakh crore on July 5.

“The government’s decision to increase the income tax surcharge on HNIs will result in additional revenues of around Rs 12,000 crore. This may affect demand for high-end real estate as the additional annual tax outgo is quite substantial at about 25-50 per cent of annual EMI related to a high-end properties,” Kotak Institutional Equities said in a report.

The brokerage believes the government’s decision to raise cess on auto fuels, slap higher levies on gold and high-income households may have certain unintended macroeconomic consequences and prolong the ongoing economic slowdown.

Coming to top losers, shares of Talwalkars Healthclubs have tumbled the most at 44 per cent since Budget. It was followed by Cox & Kings (down 42 per cent), Capital Trust (down 42 per cent), Cox & King Financial Service (down 42 per cent) and RMG Alloy Steel (down 40 per cent).