Cyclical, capital-intensive sectors largely 'resilient outperformers' since March'20 lows, says ICICI Securities; SBI, Infosys, Tata Steel among top names

Sensex and Nifty had logged their highest losses on March 23, 2020. In the biggest fall, the former tanked by 3,934 points to 25,981and the latter closed lower by 1,135 points to 7,610 on March 23, 2020 amid rising cases of coronavirus and subsequent lockdown in many states. Sensex hit an intraday low of 25,880 and Nifty had fallen to 7,583.  

As per ICICI Securities, since March'20 lows, Nifty50 has shown up move of 10% or more on seven instances, while it declined 6% or more on six occasions. The factors contributing to volatility in the market during this period were Covid 19 surge, QE reversal, US Federal Reserve’s interest rate hike, geopolitical crises and crude oil spike.  

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During this period, ICICI Securities identified some resilient outperformers, which rise more during market upsides, and fall less during downtrends.  

Who are resilient outperformers?

"We define resilient outperformers as stocks/indices that have outperformed in at least half of the instances, both during the upmoves as well as the down moves of the market. Also, the stock/index should have outperformed the NIFTY50 over the entire period under study (since Mar’20) to qualify as a resilient outperformer," says the brokerage.  

The stock should be part of F&O list for fulfilling the criteria of ample liquidity, it says.  

Within the NSE100, 18 stocks have qualified on the above ‘resilient outperformer’ criteria.  

As per the brokerage, cyclical and capital-intensive sectors (industrials, energy, metals, selectively financials & discretionary consumption) along with export-oriented stocks (IT, pharma, chemicals, etc.) are the most resilient outperformers. On the basis of investment style, mid/small caps have emerged as resilient outperformers.

Largely, resilient outperformer stocks are from conglomerates (energy, retail, telecom), metals, energy, retail, industrials, financials and exporters (IT services, pharma, chemical).
Top resilient outperformer stocks & indices

Important stocks among resilient outperformers include names such as Reliance Industries, SBI, Infosys, Larsen & Toubro, Bajaj Finserv, Titan Industries, Sun Pharma, ONGC, Adani Ports, Tata Steel and Grasim.

NSE Midcap, NSE Smallcap, NSE High Beta, NIFTY Metals, NIFTY Infra, NIFTY Auto and BSE Consumer Durables were among key sector and style indices emerged as resilient outperformers during the said period.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)