Mutual funds went on a shopping spree in August, investing a whopping Rs 35,600 crore in the Indian secondary market while foreign institutional investors (FIIs) took a step back, selling off Rs 2,700 crore.
With close to Rs 20,000 crore pouring in every single month, and NFOs being launched on newer themes, the abundance of liquidity is creating buying power like never before.
With a vast swath of sectors and stocks offering good growth, managers seem to be churning stocks more often swapping underperformers for outperformers, creating its own momentum. That’s why the list of additions and subtractions in stocks across fund portfolios looks more diverse lacking focus on any particular sector or theme.
Take a look at the portfolio changes across market-cap schemes (excludes all thematic schemes, index fund and hybrid schemes) culled out by Nuvama.
In the large-cap universe, Zomato, TCS, Trent, and Maruti Suzuki turned out to be the hottest items on the block.
But how about HDFC Bank, Reliance Industries, Apollo Hospitals, and Infosys? Out they went, with Adani Enterprises getting a full cold shoulder exit, although mutual fund collectively bought Rs 4,200 crore of securities across Adani stocks and Rs 900 crore worth of Adani Enterprises in other schemes.
Among the mid-caps MFs went heavy on Kalyan Jewellers, Delhivery, Mphasis, leaving Oil India, Dixon Tech in the dust. Newcomer F A C T made its way into the portfolios. And, the small-cap sector saw Zen Technologies, Aster DM Health making waves while NACL, Laurus Labs were shown the door.
The assortment of stocks that are making their way into fund portfolios clearly shows the new mantra is bottom-up stock picking. Gone are the days when some sectors and themes will do an encore. Now, it is all about the bottomline and the trendline (in stock prices).
Stove Kraft (CMP: Rs 938.10, +7.7%)
Emkay initiates 'buy' coverage on the stock
Bull case: Analysts find Stove Kraft valuations attractive amid strong market share gains at 35 percent EPS CAGR along with robust free cash flows. The company's improving distribution expansion, including new-age channels such as e-com and modern retail also augurs well for the stock's re-rating
in the long run.
Bear case: Huge operating leverage, capex cycle nearing an end, and discouraging imports are some of the headwinds that could limit the stock's re-rating. Moreover, muted mass consumer demand cycle can also plague the company.
Macrotech Developers ( Rs 1,275, +3.6%)
Shares rose after Nomura initiated with a buy citing multiple levers for growth.
Bull Case: Strong earnings visibility backed by sound capital-allocation strategies bode well for the company. Macrotech is well-positioned to surpass its business development goals, ensuring sustained future growth. The Palava project, on the verge of significant infrastructure upgrades, is likely to benefit from both volume and price growth.
Bear Case: A potential slowdown in India’s residential market or delays in infrastructure upgrades around Palava.
Max Healthcare Institute (Rs 933, +2.7%)
Shares were in focus after the company announced acquiring a controlling stake in Jaypee Healthcare (JHL). The deal is valued at an enterprise value of Rs 1,660 crore.
Bull Case: Upon closing the deal, the company will add 700 beds, increasing its total capacity from 4,300 to 5,000 beds. The company plans to expand the Noida facility to 1,200 beds in the coming years. With Max's entry, JHL's Noida hospital capabilities across specialties are expected to improve, along with an enhanced case mix. JHL is expected to generate sales of Rs 590 crore in FY26 and Rs 710 crore in FY27, contributing approximately 5 percent to Max's overall network sales.
Bear Case: Upcoming competition from Medanta's greenfield facility in Noida could limit the company's market dominance in the region. Centrum Broking reduced the FY25 EPS by 2 percent due to an increase in operating expenses and finance costs, stemming from the acquisition. The Rs 1,050 crore short-term loan to refinance JHL's debt adds to Max's financial obligations.
(With inputs from Neeshita, Veer and Lovisha)
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