- Indian markets have risen in two sessions, raising hopes of correction ending soon
- 492 large-cap stocks mostly fell, with only 58 showing positive returns since conflict started
- Birla Corp fell 22% but has a potential 70% upside
Indian markets have seen an uptick over the last two sessions, sparking debate around whether the recent correction may be nearing its end. While the broader trend remains uncertain, a cluster of heavily corrected stocks is now drawing attention for potential sharp pullbacks.
An analysis of 492 companies with a market capitalisation above Rs 5,000 crore and coverage by at least five analysts shows that the sell-off was widespread. Only 58 stocks managed to deliver positive returns from the onset of the conflict until last Friday, highlighting the extent of the drawdown.
Against this backdrop, several companies that saw steep declines are now being viewed as recovery candidates, with analysts assigning meaningful upside over the next 12 months.
Among the hardest hit stocks, Birla Corp has declined 22% during the period but carries an estimated upside potential of 70%. According to the analysts the upside would be supported by premium cement aiding profitability, though capacity constraints may limit volume growth.
| Stock | War Impact (% Fall) | Return Potential (%) |
|---|---|---|
| Birla Corp | -22% | 70% |
| Sapphire Foods | -20% | 70% |
| Signature Global | -19% | 52% |
| Pine Labs | -16% | 53% |
| JK Lakshmi Cement | -16% | 54% |
| Five-Star Business | -15% | 76% |
| EPL | -15% | 64% |
| KPIT Tech | -14% | 83% |
| Mrs. Bectors | -13% | 55% |
| Newgen Software | -13% | 79% |
Sapphire Foods declined 20% but could also deliver up to 70% returns, driven by strong same-store sales growth, even as margin pressures remain a concern.
In the real estate space, Signature Global dropped 19% and carries a potential upside of 52%, backed by new developments and joint ventures, though risks to pre-sales guidance persist.
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Technology-focused names are also in focus. KPIT Tech, down 14%, but has the highest estimated upside at 83%, supported by strong demand from Europe. Similarly, Newgen Software, which fell 13%, could see a 79% recovery driven by its AI-led no-code offerings. However, both face risks from slowing client spending and deal closures.
Among financials, Five-Star Business Finance has declined 15% but offers a 76% upside, aided by improving asset quality trends, although concerns around AUM growth remain.
Other names include EPL which is currently down 15% with a 64% upside potential, supported by strong performance in the beauty and cosmetics segment, but exposed to global supply chain disruptions. JK Lakshmi Cement, which fell 16%, may benefit from price hikes improving realisations, while Pine Labs and Mrs Bectors also feature on the list with upside potential exceeding 50% with risks tied to cash conversion and export demand, respectively.
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