Top loss-making firms created Rs 2.3L cr wealth for investors in just over a year

Tata Motors reported Rs 13,016.10 crore loss for FY21 but has created Rs 94,513 crore wealth for investors since April 2020. The yearly loss included Rs 7,605.40 crore surprise write-downs in March quarter. Analysts see some near-term pain, but expect a recovery in operational performance going ahead.

Investors probably believe robust free cash flow generation at the company could lead to a significant drop in debt levels. CLSA and Edelweiss see the stock at Rs 450 and Rs 432, respectively.

InterGlobe Aviation reported Rs 5,806.43 crore loss for FY21 but added Rs 27,843 crore to investor wealth in the last 15 months. Investors are positive, given InterGlobe’s capacity expansion, penetration into tier II-III cities, focus on route optimisation and likely market share gains post Covid disruption. BoB Capital Markets has raised FY23 EPS estimates for InterGlobe and revised its target to Rs 2,000 from Rs 1,100 earlier.

Shares of DHFL had almost doubled price from April 2020 level, despite reporting Rs 15,051 crore loss for FY21. The run halted as the stock exchanges suspended trading the stock from Monday, with the share value written off to zero.

BHEL ended up with Rs 2,743.84 crore in loss for FY21 against Rs 1,494.07 crore in FY20. Analysts see up to 50 per cent downside potential in the stock, Edelweiss has a target of Rs 29 on the stock. CLSA and Motilal Oswal Securities peg the stock value at Rs 40 each.

Punjab & Sind Bank, Tata Teleservices (Maharashtra), Reliance NSE 0.23 % Capital and Alok Industries were among the other loss-making companies, whose shares have rallied up to 1,250 per cent since April 2020.

Punjab & Sind Bank reported a profit in March quarter after eight quarters of losses. Not many brokerages track this stock.

In the case of Tata Teleservices (Maharashtra), an ET report suggested that Tata Sons is reviving the telecom entity in a new avatar, called Tata Tele Business Services, which will cater to small and medium enterprises. This scrip is also not on brokerage radar.

Alok Industries’ stock climbed after relisting on hopes that the company would turn around under the new owners. The company was taken over by Reliance and JM Financial Asset Reconstruction company.

YES Bank was the only loss-making stock among the top 10, which has delivered a negative 35 per cent return since April 2020.