771.0 -16.59 (-2.15%) Buy

Search for alternative investments is on for IPCALAB investors as it underperforms broader market

13 min read

IPCA LABORATORIES LTD is a falling knife that can bleed you if you catch it on Friday. It delivered -2.15% to close at 771.0. On a day when the overall market breadth was 71%, it closed higher than 35% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.

[Themes containing IPCALAB]

Buy-and-Hold investors in IPCALAB experienced a maximum drawdown of -5.56% over the last three months. It increased by +15.36% during this strong bullish trending period. There were both Long and Short signals during this period, while the long signals were significantly more profitable than the short signals. The net profit from Long signals was +6.65%.


IPCALAB has been underperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 4 Jan, 2016 to 1 Sep, 2017. Over the last 3 years and 1 month, IPCALAB underperformed the NIFTY-50 index on 53% days.

During the last three months IPCALAB was mostly profitable and delivered on average +0.24% per day. It's best return during this period (of +3.66%) was on Thursday, 22 Nov, 2018. While it's worst loss in the same period (of -2.83%) was on Thursday, 20 Dec, 2018. The longest stort-term trend during this period was 8 profitable days, which started on 7 Nov, 2018 and went on till 19 Nov, 2018. This bullish trend returned +10.71% to investors.

The last 12 months saw IPCALAB's investors making profits in 8 months and incurring losses in 4 months. During the last year, IPCALAB delivered profits in more months than NIFTY-50 index. IPCALAB significantly outperformed NIFTY-50 index in Feb 2018, when it returned +17.15% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. IPCALAB had a longer winning streak of profitable months than NIFTY-50 index. It went up in 3 straight months (from Jun 2018 to Aug 2018) during which period it delivered +15.94%. It is interesting to note that both IPCALAB and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

When I graduated, I promptly took a job in finance, making both my pre-med and poli-sci years essentially useless - or so I thought.
-- Yael Cohen

IPCALAB is currently seeing overall fall in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in IPCALAB's volatility from 30 Oct, 2018 to 16 Jan, 2019. While there was a significant fall in the NIFTY-50 index's volatility from 31 Oct, 2018 to 5 Dec, 2018.

Advanced/professional short-term investors should note that IPCALAB has significant negative skewness in it's return distribution. This indicates that IPCALAB is very risky for short-term investment and can significantly underperform for long durations.

NIFTY-50 index has more chance of extreme outcomes than IPCALAB. Therefore, NIFTY-50 must receive a lower allocation than IPCALAB in your portfolio. NIFTY-50 index usually has shorter drawdown period than IPCALAB.

Based on your interest in IPCALAB you may find it interesting to know that BAJFINANCE and BRITANNIA have both shown remarkable performance and deserve to be on every investors' watchlist.

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