Bharti Airtel To Hero MotoCorp: Stocks That Surprised Or Disappointed Analysts The Most In 2021
Analyst predictions turned out right for more than three-fourths of BSE200 companies this year.
Analysts correctly predicted the fortunes of over 75% of BSE200 companies this year. The rest surprised.
Shares of 152 of the 192 index constituents met the 12-month price target estimates made at the start of the year, according to Bloomberg data. 40 missed forecasts.
That came in a year India’s stock benchmarks ranked best among global peers, scaling new peaks on a retail frenzy. The Sensex and Nifty 50 have gained more than 20% in 2021 even as concerns over a faster withdrawal of monetary stimulus and the Omicron strain added volatility towards the end.
Here are the stocks that surprised the most.
Selection Criteria
BSE200 stocks whose 12-month target price estimates were available at the start of the year (192 companies).
Tracked by at least 10 analysts.
Tipped To Be Best—Did They Live Up?
Three of the top five stocks expected to return most gains—UPL Ltd., Hindustan Petroleum Corp. and Bharti Airtel Ltd.—either met forecasts or did better.
NTPC Ltd. and Coal India Ltd. took a hit on account of a shift of value toward renewables.
Tariff hikes helped Bharti Airtel gain share in the mobile business, tap opportunities in data, enterprise and payments.
Need for food security, better demand, higher commodity prices and balance sheet deleveraging aided UPL.
HPCL advanced on increased refining margin and product cracks, and steady marketing margin.
Surprise, Surprise: The Leaders
Polycab India Ltd. surprised the most as the cables and wires maker beat estimates by the widest margin. That was aided by a revival in government capex and private sector spending.
Strong deal wins and accelerated growth in the U.S. and EMEA (Europe, Middle East, Africa) regions supported Mphasis Ltd., while higher steel prices, increased volumes and continued deleveraging worked in Tata Steel Ltd.’s favour.
Grasim Industries Ltd. was helped by an improved outlook for its subsidiary UltraTech Cement Ltd., and price hikes in the chemicals segment. Hindalco Industries Ltd. benefited from a rise in aluminum prices due to supply disruptions triggered by production curbs in China.
Surprise, Surprise: The Laggards
Analysts were most off the mark for Bandhan Bank Ltd. The lender’s shares tumbled because of higher bad loans and rising provisions.
Petronet LNG Ltd. and Aurobindo Pharma Ltd. followed, missing targets by 30% or more. While a surge in spot LNG prices, surplus capacity due to starting of new gas terminals and increase in domestic gas production weighed on Petronet, continued competitive pressures in the U.S., rising costs and poor sales dragged the drugmaker’s stock.
Hero MotoCorp Ltd.’s performance was impacted as two-wheeler demand failed to pickup even amid the festive season, and raw material costs rose.
Analysts' Top Stock Picks For 2022
Looking Ahead
IndusInd Bank has the highest price potential for 2022, while India’s steelmakers dominate the pack of stocks expected to perform better than others in the coming year.
(The reasons for stock price movement have been compiled from research reports by Emkay Global, Anand Rathi, Edelweiss, Centrum Broking, ICICI Securities, Jefferies, Prabhudas Lilladher.)