Tech Mahindra, Wipro, HCLTech, SBI—Stocks That Defied Market Rout

India's Sensex and Nifty have fallen over 10% from their October highs, driven by concerns over foreign outflows and weak corporate earnings.

Despite this, Tech Mahindra Ltd., Wipro Ltd., HCLTech Ltd., and SBI continued to post gains. Since Sept. 27, when the benchmarks hit record highs, their shares have risen by 3.2%, 2.04%, 1.47%, and 1.45%, respectively. Year-to-date, they have increased by 24.1%, 13.6%, 21.9%, and 25.2%, respectively.

Tech Mahindra, Wipro, HCLTech, and State Bank of India are the only four Nifty stocks that gained while India's equity benchmark entered correction territory.

One reason could be that Wipro, HCLTech, and SBI are currently trading at slightly lesser valuations as of Monday as compared with their valuations when Nifty hit its peak in September, while the valuations for Tech Mahindra increased marginally.

Wipro’s stock traded at 25.21 times its earnings as of Monday, while shares of HCLTech, SBI, and Tech Mahindra traded with a price-to-earnings multiple of 30.55 times, 10.03 times, and 63.3 times, respectively, according to Bloomberg data. That compared with 25.32 times, 30.65 times, 10.55 times, and 60.36 times the price-to-earnings ratio for shares of Wipro, HCLTech, SBI, and Tech Mahindra, respectively.

The other reason for Tech Mahindra’s shares to rally is the company posting its record profit growth on a sequential basis during the three months ended September, while its margin expanded 114 basis points to 9.61% during the period.

Besides, for Wipro, the company approved the issuance of bonus shares while it reported its September quarter results. Previously, the company had previously issued bonus shares in 2019 and 2017.