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Despite the sharp bull run that took India’s stock markets to record highs, around a fifth of the stocks in Nifty 500 index, a collection of the biggest companies in the country, have delivered zero or even negative returns, with their stock languishing below their pre-covid levels.

Many brokerages take pre-covid period as the time before 17 January 2020, when India issued its advisory to avoid travel to China.

Many stocks such as ITC Ltd, Bharti Airtel Ltd, Maruti Suzuki India Ltd, ONGC Ltd, Indian Oil Corp Ltd, Coal India, HDFC AMC, PVR Ltd, Bata India Ltd, L&T Finance, Inox Leisure, Indusind Bank, RBL Bank, Bandhan Bank, Punjab National Bank are still trading below their pre-pandemic levels.

Meanwhile, both the benchmark Sensex and Nifty touched a record high on 28 June, while the Nifty 500 index hit an all-time high on 16 June.

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“While benchmark indices have touched record highs in the last couple of weeks, there are still a large number of stocks which are trading below their pre-covid prices. We believe that ambiguity over earnings recovery for select sectors against the backdrop of covid-19 and deterioration in margins along with increased working capital needs weighed on stock performances. We believe that the ramp-up in vaccination programme and opening-up of complete economy in ensuing months would be key catalysts for sectors like hospitality, tours and travels, hotels, etc." said Binod Modi, head of strategy at Reliance Securities.

Analysts attributed the negative or low returns in some popular auto and auto ancillary stocks that are actively traded in futures and options to revenue slowdown as a result of lower demand due to lockdowns imposed by many states across the country in recent months.

Among the banking and financial stocks, those lenders that have witnessed relatively more downside due to the loan moratorium announced last year and rising bad loans have lagged. In the fast-moving consumer goods space, ITC saw negative returns because of low demand from the cigarette and hotel business. Oil and gas sector stocks also faced impact due to lower crude oil prices last year and low demand. In the telecom sector, Bharti Airtel has given negligible returns since the start of the pandemic in the absence of tariff hikes since last year, analysts said.

“Overall, we believe the growth phase should return in these sectors from the third quarter of FY22 on the back of economic measures taken by the government and good demand which has started to pick up post unlocking," said Akhil Rathi, vice president advisory at Marwadi Shares and Finance.

Companies that have seen the most erosion in their stock prices since the start of the pandemic include Future Retail Ltd, Yes Bank, Future Consumer, DCB Bank, GE Power, Chalet Hotels and Raymond, which have lost 40-81%.

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