21 worst performers of last year fail to find buyers in 2022 as well. Will they continue falling?

These names are Engineers India, Solara Active Pharma Sciences, Bombay Burmah Trading Corporation, HDFC Asset Management Company, EPL, Mahanagar Gas, Restaurant Brands Asia, Procter & Gamble Health, Aarti Drugs, Wockhardt, City Union Bank, SpiceJet, Jubilant Pharmova, MAS Financial Services, Astrazeneca Pharma, Hathway Cable & Datacom, IOL Chemicals And Pharmaceuticals, Vakrangee, Spandana Sphoorty Financial, Strides Pharma Science and Ujjivan Small Finance Bank.

Interestingly, these stocks are not just from a beleaguered sector but they are from a diversified mix of segments and market capitalisation. Moreover, none of them are the so-called ‘penny stocks’ which might have explained their consistently poor performance.

At least one-third of the stocks are from healthcare and pharma sectors that saw massive profit booking after the impact of the pandemic softened over the last few months.

This is at a time when the pharma sector has delivered some of the best numbers. ICICI Securities in a recent note noted that the pharma segment has witnessed expansion in Ebitda margin as well as steady to improving CFO (cash flow from operations) to interest.

But, things may change for some of these stocks, especially those having a presence in some of the niche segments. “Emerging trends clearly changed from US generics to CDMO/CRAMS/ APIs since 2015. The key has been to identify managements with domain expertise in chemical synthesis in their respective segments and speciality drugs,” said Sachin Shah, Fund Manager, Emkay Investment Managers.

Another sector that finds ample representation in the list is financial services, with at least five of them from the sector that has seen mixed performance especially due to heavy selling by foreign investors in the last few months. They are some of the biggest investors in the sector.

Fundamentally, though analysts believe not much is wrong in the financials basket. As the economy is recovering, loan disbursal is picking up and so is domestic investment. Thus some of these names are set to outperform their peers.

For instance, analysts are super bullish on Spandana Sphoorty with target signaling almost 90 per cent of gains from current level. Similarly, HDFC AMC has a target with potential upside of 84 per cent.

There are some names from other sectors as well, which also have general consensus ratings of ‘buy’. Though, some of the lesser tracked companies could be risky propositions.