A host of stocks from large, midcap and smallcap spaces saw steep decline in their prices, resulting in a fall in valuation multiples. They included Suzlon Energy Ltd, Adani Green Energy Ltd, Bharat Heavy Electricals Ltd (BHEL), Adani Energy Solutions Ltd, Inox Wind Ltd and Trent Ltd, among others.
“Just like every cloud has a silver lining, a market downturn also brings new investment opportunities. A correction phase reduces valuation premiums, creating valuation comfort once again,” said Amar Nandu, Research Analyst, SAMCO Securities.
In the recent downturn that began at the end of September 2024, a total of 272 out of the top 500 market capitalisation stocks (54.40 per cent) have fallen over 20 per cent from their September-end levels as of February 21, 2025.
“Buying stocks during a dip can lead to higher compounding returns when the uptrend begins. However, there is a risk of further decline, but for long-term investors, the current levels may offer strategic entry opportunities,” Nandu said.
SAMCO Securities came out with three tables that suggested 10 stocks from each market capitalization category — large cap, midcap and smallcap, that experienced the maximum drop in their PE multiples from September 30, 2024, to February 21, 2025, along with their prices, PB multiples and respective index data for comparison.
In the large Cap 100, two Adani group stocks Adani Green Energy Ltd and Adani Energy Solutions Ltd saw their shares plunging 55 per cent and 34 per cent, respectively. Their price-to-earnings (PE) multiples declined 63 per cent and 54 per cent, respectively, during the said period. On price-to-book ratio, they witnessed declines of 57 per cent and 55 per cent, respectively.
Largecap stocks such as Bharti Airtel, Ambuja Cements, Samvardhana Motherson International Ltd, ABB India, BHEL, Trent, GAIL and BPCL saw 4-39 per cent drop in share value but up to 52 per cent drop in PE multiples and up to 41 per cent drop in P/BV multiples.
In the case of midcaps, stocks such as Suzlon Energy Ltd, Voltas Ltd, Adani Wilmar Ltd, ACC Ltd, Kalyan Jewellers India Ltd and Hitachi Energy India Ltd saw 20-37 per cent drop in market value, up to 49 per cent drop in PE levels and up to 57 per cent slump in P/BV.
In the smallcap space, Swan Energy, Sonata Software, Inox Wind, Honasa Consumer, RailTel, Whirlpool of India, Tejas Network and Signatureglobal (India) Ltd are among stocks selling steep fall in share values and price multiples.
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