For five years, investors who owned some of India’s most trusted bluechip stocks have had little to show for their patience. TCS has fallen nearly 42%, Infosys almost 39%, while Hindustan Unilever (HUL) and Asian Paints have declined about 32% and 30%, respectively.
The list also includes HDFC Life, HDFC Bank, Reliance Industries, Bajaj Finserv and HCL Tech. Together, the nine stocks span some of India’s largest technology companies, most valuable consumer franchises, leading financial institutions and one of the country’s most diversified conglomerates.The average decline is about 22%, according to ACE Equity data.
“Some of the most popular, the best-quality businesses have shown mean reversion,” Dalal Street’s ace fund manager Prashant Jain of 3P Investment Managers said when asked on the underperformance of bluechips at the ET Alpha Wealth Summit 2.0 recently. “When something mean reverts, investors are disappointed and they are again extrapolating the past and therefore that pendulum does not stop at fair value, it goes below fair value.”
“These are some of the finest businesses, the mega caps some of them,” Jain said. “I think they are extremely attractive. Some of these I am owning for the first time in the last 25 years in my fund. I have never owned them because they were so expensive.”
