Darlings of Dalal Street: The stocks most owned by mutual funds

The most owned consumption stock is Titan, followed by ITC and HUL in the FMCG segment

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TCS and ICICI Bank have topped the list of stocks most owned by mutual funds, with 40 fund houses holding the two bluechips in their various schemes.

Infosys and Maruti Suzuki are in the second spot, with 39 asset management companies (AMCs) owning these two companies in November, data sourced from Emkay shows.

The most owned consumption stock is Titan followed by ITC and Hindustan Unilever (HUL) in the FMCG segment.

Sun Pharma emerged as the most favoured in the pharmaceutical space, while the AMCs’ preferred pick among NBFCs is Bajaj Finance.

Despite the headwinds facing software service exporters, IT firms are well represented in the list, including midcap names such as Persistent Systems, LTIMindtree, Mphasis and Coforge.

State Bank of India is the only PSU bank owned by at least 30 AMCs in India’s 45-player mutual fund industry. SBI and NTPC are the most held PSU stocks.

Also read:  “Strong buy” smallcap stocks by PMS in November

Clear favourites

"Form is temporary; class is permanent" can be an apt description for the most owned IT stock – TCS.

High interest rates and negative consumer sentiment in the US and Europe – the biggest markets for domestic software firms – have made 2023 a year to forget for India’s IT sector.

TCS, which derives around 68 percent of its revenues from the US and EU, is especially vulnerable to global macroeconomic uncertainty.

The pain was visible in the September quarter earnings when TCS posted a contraction in USD revenues for the first time since the pandemic-hit June 2020 quarter as well as the highest-ever quarterly decline in headcount, triggering an avalanche of target price cuts.

Also Read: India's $245 billion IT sector swallows tougher terms amid scramble for contracts

However, many analysts have voiced support for India’s largest IT company.

“With a sharp recovery in 2Q EBIT margin performance, TCS should benefit from its scale and ability to optimise talent to control costs in the near to medium term. This is especially visible in the fact that it has given timely increments despite growth concerns, which we expect to pay out over the medium term through easing attrition,” domestic brokerage firm Motilal Oswal said in a recent note.

Demonstrating its dominance, TCS reported deal wins of $11.2 billion, its second-highest-ever total contract value (TCV) and also the third consecutive quarter of deal wins staying above $10 billion — a milestone for India’s $245-billion Indian IT industry.

With the US Federal Reserve signalling rate cuts in 2024 as macroeconomic conditions improve, some experts feel this will give a further boost to TCS and the entire IT pack.

ICICI Bank, the other most favoured stock, is gradually eclipsing its larger peer HDFC Bank as the banking sector bellwether.

As per Moneycontrol’s Analyst Call Tracker for November, ICICI Bank had the most "buy" calls among Nifty companies at 48.

The country’s second-largest private sector bank hogged the limelight during the September-quarter earnings season after posting a 35.5 percent year-on-year (YoY) rise in standalone profit at Rs 10,261 crore, surpassing estimates.

The company’s net interest income (NII) jumped 24 percent YoY to Rs 18,308 crore as bad loan provisions dropped significantly.

“ICICI Bank has been demonstrating reasonable consistency in sustaining growth leadership across segments…while simultaneously managing a superior asset quality. Coupled with incremental investments around digital and physical channels, we are confident of the bank’s ability to drive productivity and efficiency gains on its way to deliver and sustain RoAs in excess of 2%,” HDFC Securities said.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.