But ever so often, there are instances when the market’s efficient machine fails to function to its fullest; such moments are witnessed during phases of extreme greed and extreme fear when emotions rein over common sense and fundamentals.
Can Fin Homes, a housing finance company, is an example of one such anomaly. While the Nifty500 index has risen around 28 per cent in 2021 so far, shares of
have climbed merely 18 per cent.
Analysts believe that the underperformance of the housing finance company is unwarranted and is largely because its parent is a state-owned enterprise. Some point to the company’s stellar asset class throughout the COVID-19 period, which has barely gone above 1 per cent, suggesting that investor skepticism may be at its peak.
Evidence now suggests that investors are finally catching up as the stock has risen close to 18 per cent in the past two weeks including today’s over 4 per cent rise, while the Nifty500 index has climbed merely 6 per cent.
CLSA’s word of optimism
Nearly a year ago, CLSA Global Markets took the stock market by surprise with its bullish report on ITC that projected substantially large gains for the stock on the back of optimism for the non-cigarette FMCG business.
Today, the brokerage firm came to reassert that bullishness in a way suggesting investors to keep faith despite the disappointing stock performance for the company in the past one year.
Shares of ITC ended over 1 per cent higher and were a major reason why the benchmark indices trimmed their losses for the day. CLSA believes that the company’s FMCG business is slated for over 30 per cent annualized growth in the next four years, helped by a myriad of factors and the record valuation discount to its peers, is a compelling opportunity to buy.
Vodafone Idea soars again
The roller coaster ride of being an investor in Vodafone Idea continues. Today, the stock soared over 14 per cent in the renewed hope that the government is on the verge of announcing relief measures for the telecom sector that could extend the company’s life a little bit longer.
The stock had come under tremendous selling pressure towards the end of August as concerns over its ability to sustain the business grew manifold. With Kumar Mangalam Birla appearing to almost give up by offering his stake to the government and the government unwilling to offer company-specific relief, prospects for the company appeared dim.
To be sure, the prospects still appear dim unless the government offers substantial leeway on the repayment of the adjusted gross revenue dues and spectrum fees. Vodafone Idea’s investors will hope this is the last time that the company needs anyone’s help.