Covid-19 has affected every hemisphere and aspect of our lives, and the stock market isn’t any different. When Covid-19 hit the world in March 2020, the Indian stock market, i.e., NSE and BSE took a huge hit and the indices were at a 3 year low. However, the fear and uncertainty in the market was quickly resolved, and soon share prices started rising. Certain sectors such as Pharma, IT and finance have performed very well since the pandemic. Here are the top 10 best stocks during pandemic:
DIVISLAB – Divi’s Laboratories Ltd is an India based manufacturer of Active Pharmaceutical Ingredients (APIs) and Intermediates. It is among the largest pharmaceutical companies in India and has a market presence across various countries. Divi’s Laboratories developed a process to manufacture Hydroxychloroquine and Favipiravir, which are used in the treatment of COVID-19, from indigenous raw materials.
In January 2020 its share price was Rs.1818, and yesterday, its closing price was Rs.5168. In less than two years it has given over 184.2% return. It is a large cap company that is almost debt-free, which is why it has low risk. It has strong financials too, with it PE ratio being almost double the sector PE ratio. It is predicted that by 2022, its share price will cross even Rs.6000.
INFOSYS – The pandemic increased the pace of technology adoption across the globe as clients and their customers started moving to a digital environment. Even industries that were traditionally not IT-driven or had little dependence on IT started adapting their businesses to the new normal as they felt the need for more agile digital solutions. Infosys is the 2nd largest company in India in the IT sector. In January 2020. its price was around Rs.700 and today, it closed at RS.1671, more than double of what it was last year. It provides good dividends, has high revenue growth and an increasing market share.
ADANI TOTAL GAS – Adani Gas is in the business of developing city gas distribution networks. It is a large cap company belonging to the Indian MNC Adani group. It plans to enter new businesses of biogas, biofuel, biomass,, HCNG (high compressed natural gas), electric vehicles as well as hydrogen. Its price in January 2020 was around Rs.200, whereas now, it is Rs.1451. It has given 142.52% returns in just the last quarter, and a whooping 754% increase in the last year. This means that if you had invested 1 lakh last year, it would have been worth over 7 lakh today!
SUNPHARMA – Sun Pharmaceutical Industries Limited is a pharmaceuticals company which offers generics, branded generics, specialty products, over-the-counter products, anti-retroviral and APIs. Volini, a cream/spray that we all have at home is one of their products. Due to covid-19, they started manufacturing/distributing Remdesivir and Itolizumab in India in partnership with Syngene and Biocon. Hence, its prices rose from around 400 to 800 rupees, doubling in value.
IIFL FINANCE – IIFL Holdings Limited is a mid cap company that provides financial services and deals in equity, commodity, broking portfolio management, life insurance products, home loans, etc. Its share price in March 2020 was Rs.74, whereas now, it is Rs.323. There has been a 136.8% increase in the last quarter itself and over 300% increase in the last year. Money if invested last year would have tripled in value! Moreover, it has an increasing revenue growth and market share, making it one of the best stocks during pandemic.
ADANI ENTERPRISES – Adani Enterprises Limited is an infrastructure company with businesses spanning coal trading, coal mining, oil and gas exploration, ports, multi-modal logistics, power generation, and transmission and gas distribution. It is a large cap company of the Adani group. In January 2020, the price of one share was Rs.130, and today, it traded at Rs.1423.60. It has given an extraordinary return of 994%. 1 crore invested in January last year would have been valued at almost 10 crores today. This rise is said to have been a result of the rise in soya prices which aided its FMCG businesses.
HCL TECH – HCL Technologies Limited is engaged in providing a range of software development services, business process outsourcing services and IT infrastructure services. The increase in the usage of technology during covid has perhaps positively impacted the share prices, as they rose from Rs.434 in March 2020 to Rs.1143 today. It has increasing revenues, profits, as well as EPS (earnings per share).
DIXON – Dixon Technologies Private Limited is a mid cap company engaged in manufacturing products in the consumer durables, lighting and mobile phones markets in India. The government’s Atmanirbhar Bharat is key in this stock’s price rise, along with its expanded partnership with Samsung to manufacture televisions. It has clients like Xiaomi, Samsung, Voltas, LG, Flipkart and Foxconn. Prices hiked from Rs.652 in March 2020 to Rs.4993 today. It isn’t just giving a 665% increase in value, but a rapidly increasing market share and revenue growth.
GRM OVERSEAS – GRM Overseas is an India-based manufacturer and trader in rice varieties such as Traditional Basmati Rice, Super Basmati Rice, and Indian Long Grain Rice. It is a small cap company of the FMCG sector. Its share price was Rs.40 in January 2020, and today, it traded at Rs.1102. That is an enormous increase of 2655%. Moreover, it has a rapidly rising market share, net income and revenue growth, but a lesser than industry average PE. This implies that is stock is undervalued even now.
EVEREST KANTO – Everest Kanto Cylinder Limited is a small cap company engaged in the manufacturing of high-pressure gas cylinders such as industrial gas cylinders, compressed natural gas (CNG) cylinders, CNG cylinders etc. which have range of application including defence. With demand for breathing air apparatus on the rise, the company has profited from an increase in demand for medical gases, cylinders, and other equipment. It has also been able to get out of the heavy debt that it was under. It ow has strong financials and a low PE ratio compared to the industry average, indicating that it is undervalued. In March 2020, it was being traded at around Rs.10, but today, it was traded at Rs.112.40. This is more than a 110% increase, that has stemmed directly out of the covid-19 pandemic.
Contrary to everyone’s expectations, the impact of covid-19 was not entirely negative for the stock market, as certain sectors benefitted from the pandemic and these stocks flourished and performed very well, making them the best stocks during pandemic.