Stocks that gained when all others lost

The scrip of Jai Corp. Ltd isn’t among the most tracked shares on Bombay Stock Exchange’s (BSE) frontline stocks.
However, it has one unique distinction: It is the only scrip in BSE-500 that gained on four of the five days that witnessed the steepest falls in the Sensex. BSE-500 includes the top 500 firms on the exchange in ter-ms of market capitalization.
Jai Corp. had a market capitalization of Rs3,672 crore on 1 August and its shares rose from Rs3,777 each to Rs3,966 on Wednesday, even as the BSE’s benchmark 30-stock index, Sensex, fell by 3.96% (all the 30 stocks in the Sensex fell).
BSE-500, the broader index of the exchange, also fell 4.08% on a day when 472 of its constituent scrips declined and only 28 gained. And on 27 July, when the Sensex fell 3.42%, Jai Corp.’s shares gained 5%.
Jai Corp.’s distinction doesn’t automatically make it a good buy, say analysts.
“The stock has been on an upside because it owns a chunk of land in a controversial special economic zone in Mumbai. Besides this, I don’t see a fundamental reason for the upside in this stock,” says head of research of a broking house who didn’t wish to be identified.
Jai Corp. is based in Nanded, Maharashtra, and primarily operates in three business segments: steel, plastic processing and spinning. For the financial year ended 31 March, it reported a total income of Rs342 crore, up 63% from the previous year. It also reported a profit after tax of Rs71 crore, up 927% from the previous year. An average of 10 million shares of the company change hands every day and Jai Corp. recently announced a stock split: to split a share with a face value of Rs10 per share into 10 shares with a face value of Re1 per share.
Jaybharat Textiles, a textiles firm based in Gujarat, is another company whose shares seem resilient: it gained on 27 July and on 1 August.
It may look like a sound investment strategy for investors to look at scrips that rose while all around them fell, but experts do not share that sentiment. Most are wary of stocks that show this kind of behaviour.
“Such a drastic movement in few stocks in an otherwise bearish market is always suspicious,” says Devesh Kumar, managing director, Centrum Broking.
Amitabh Chakraborty, president at Religare Securities, says the gainers in this kind of market will always be broad-based across sectors.
“Especially in BSE-500 stocks, there will always be a set of stocks which may go up despite the falling market—the reason being that the traders normally use these stocks as a collateral for taking position in the futures and options market,” he added.