In July 2023, the benchmark Nifty 50 moved up by 2.94%, maintaining its upward momentum since April and demonstrating strength across multiple sectors. Numerous stocks continued to rise, with their Q1FY24 results surpassing investor expectations in many instances.
Mutual fund managers purchased stocks across various sectors from companies that reported better-than-expected Q1 numbers. This month witnessed buying across sectors, including a state-owned company, banks, a prominent player in the auto industry, real estate, and a newly listed company.
The following is a list of stocks from the Nifty 500 universe that experienced an increasing share in mutual fund schemes. Each of these stocks witnessed net purchases of over one lakh shares by at least four mutual schemes in July, along with a 5% rise in holdings by mutual fund schemes.
Federal Bank
Federal Bank is a banking company with a network of 1,355 branches in India. It provides a range of banking and financial services, including retail and corporate banking, as well as para banking activities such as debit and credit card services.
In Q1FY24, Federal Bank achieved its highest-ever quarterly revenues at Rs 6,091 crore. The bank has maintained a net NPA ratio below 1% for the last six quarters. Additionally, the bank has reaffirmed its guidance of achieving 18-20% year-on-year growth in both loans and deposits for FY24.
Mutual funds that increased their holdings in Federal Bank include:
- SBI Contra Fund Regular Payout Inc Dist cum Cap Wdrl
- ICICI Prudential Value Discovery Fund Growth
- Edelweiss Balanced Advantage Fund Regular Plan Growth
- HDFC Mid-Cap Opportunities Fund Growth
REC
REC is a government-owned company that extends financial assistance across the power sector value chain. It holds a significant position as a leading public infrastructure finance company in India. The primary products offered by REC include interest-bearing loans to State Electricity Boards, State Power utilities/State Power Departments, and the private sector.
In July, the Avaada Group signed a memorandum of understanding (MoU) with REC. According to the MoU, REC will invest Rs 20,000 crore in the renewable energy solutions company over the next five years.
Mutual funds that increased their holdings in REC include:
- Sundaram Mid Cap Growth
- Tata Arbitrage Fund Regular Growth
- HDFC Mid-Cap Opportunities Fund Growth
- Kotak Equity Arbitrage Fund Growth
Fortis Healthcare
Fortis Healthcare is a prominent integrated healthcare services provider in India. It stands as one of the largest healthcare organizations in the country with 29 hospitals, 4,500 operational beds, and 410 diagnostic centers.
International patients grew by 29% and contributed to 8.5% of sales in Q1FY24, up from 7.5% in Q1FY23. The management has restated its bed addition target for the next 2-3 years. The company plans to add a total of 1,400 beds within this period at hospitals like Mulund FMRI, Shalimar Bagh, Noida, etc., which will increase the operational bed count at each of these hospitals to 450-500 beds.
Mutual funds that increased their holdings in Fortis Healthcare include:
- HDFC Small Cap Fund Growth
- Mirae Asset Emerging Bluechip Fund Growth
- Mirae Asset Tax Saver Fund – Regular Plan – Growth
- Axis Midcap Fund Growth
Prestige Estates
Prestige Estates is a real estate company headquartered in Bangalore. It is involved in projects across Bangalore, Chennai, and a few other cities in South India. The company has also recently entered the Mumbai real estate market.
The company is currently working on 35 ongoing residential projects with a total development area of 46 million sq ft, as well as 12 ongoing commercial projects with a development area of 24 million sq ft. The anticipated increase in real estate consumption is expected to lead to gains from these projects being realized over the next two years.
Mutual funds that increased their holdings in Prestige Estates include:
- Motilal Oswal Midcap Regular Growth
- Motilal Oswal Flexicap Fund Regular Plan Growth
- HDFC Flexi Cap Fund Growth
- Mirae Asset Tax Saver Fund – Regular Plan – Growth
United Breweries
United Breweries is the manufacturer of Kingfisher, India’s largest selling beer brand, commanding nearly 50% market share. The company also exports its products to more than 60 countries worldwide. Alongside Kingfisher, Heineken is another brand from the company’s portfolio that is rapidly gaining market share.
Despite facing some challenges in the past few months and delivering Q1FY24 results below expectations, the company is anticipated to benefit from the growth of the alcoholic beverage market and the strength of the Kingfisher brand, resulting in improved performance over the next few quarters.
Mutual funds that increased their holdings in United Breweries include:
- SBI Equity Hybrid Fund Regular Payout Inc Dist cum Cap Wdrl
- SBI Multicap Fund Regular Growth
- Nippon India Large Cap Fund – Growth
- ICICI Prudential Multi-Asset Fund Growth
Hero MotoCorp
Hero MotoCorp is India’s leading two-wheeler manufacturer in terms of unit volume sales in a calendar year. It commands nearly 50% share in the Indian motorcycle market and exports to numerous countries. The company operates seven manufacturing facilities, including five in India and one each in Colombia and Bangladesh.
The company has introduced several new launches expected to bolster its market share. These include the new Xtreme 160R 4 Valve in the premium segment. It has also garnered more than 25,000 bookings for its Harley Davidson partnership launch, the X440. Additionally, Hero MotoCorp is actively promoting its electric scooter, Vida. It has announced plans to expand the presence of its Electric Vehicle (EV) VIDA V1 to 100 cities within the calendar year 2023.
Mutual funds that increased their holdings in Hero MotoCorp include:
- Nippon India Focused Equity Fund – Growth
- Nippon India Tax Saver (ELSS) Fund – Growth
- ICICI Prudential Focused Equity Fund Growth
- DSP Midcap Fund Growth
Eris Lifesciences
Eris Lifesciences Ltd is the sole publicly listed Indian pharmaceutical company with a pure-play domestic branded formulations business model. Over just 15 years since its inception, Eris has established a prominent presence in its core cardio-metabolic franchise. The company has also successfully diversified its operations with three emerging therapies (Dermatology, Neuropsychiatry, and Gynaecology), contributing to 20% of its revenue.
In Q1FY24, the company reported its highest-ever quarterly revenues at Rs 467.6 crore. Domestic formulations revenue grew by 21% YoY during this period. Eris Lifesciences has a new product pipeline with 8-10 launches scheduled for the remainder of the year, spanning segments such as acne, hair-care, emollients, anti-fungal, and more.
Mutual funds that increased their holdings in Eris Lifesciences include:
- HDFC Small Cap Fund Growth
- HDFC Large and Mid-Cap Fund Growth
- Franklin India Equity Hybrid Fund Growth
- Bank of India Small Cap Fund Regular Growth
Century Textiles
Century Textiles, a constituent of the Aditya Birla Group, operates as a diversified conglomerate involved in the manufacturing of pulp and paper products, textiles, and real estate development across various states in India. Pulp and paper products contribute to 69% of the company’s revenues, while textiles account for 26%, and the remaining portion comes from real estate.
Recent land acquisitions in prime locations of Pune, Bengaluru, and Mumbai are expected to significantly enhance earnings once these projects progress through construction stages. The Paper & Pulp Business commands the largest market share in North India, and the doubling of capacity in the Tissue Paper segment is poised to further strengthen its position.
Mutual funds that increased their holdings in Century Textiles include:
- HSBC Small Cap Fund Fund Regular Growth
- Quant Small Cap Fund Growth
- HSBC Value Growth
- HSBC Balanced Advantage Fund Growth
Mrs Bector Foods
Mrs Bectors Food Specialities is engaged in the business of manufacturing and distributing food products, notably under the brand name Cremica. The company continues to experience robust revenue growth with a 24% YoY increase in Q1FY24, driven by distribution expansion in existing and new markets, accompanied by broad-based growth across the biscuits and bakery segment. The company’s net profits have displayed steady growth over the past few quarters, with Q1FY24 net profits reaching Rs 39.4 crore, reflecting a YoY surge of 173.7%.
Mutual funds that increased their holdings in Mrs Bector Foods include:
- Axis Multicap Fund Regular Growth
- Axis Small Cap Fund Regular Growth
- Invesco India Multicap Fund Growth
- Invesco India Smallcap Fund Regular Growth
Cyient DLM
Cyient DLM stands as a leading integrated electronics manufacturing services provider, catering to defense, aerospace, medical, and industrial applications. The company was listed on the stock exchanges on July 10, 2023, and has gained more than 25% since its listing. Several mutual fund schemes have invested in this stock post listing.
Mutual funds that increased their holdings in Cyient DLM include:
- ICICI Prudential Smallcap Fund Growth
- Nippon India Power & Infra Fund – Growth
- Tata Infrastructure Fund Growth
- HDFC Defence Fund Regular Growth
ABOUT THE AUTHOR
Ketan Sonalkar (SEBI Rgn No INA000011255 )
Ketan Sonalkar is a certified SEBI registered investment advisor and head of research at Univest. He is one of the finest financial trainers, with a track record of having trained more than 2000 people in offline and online models. He serves as a consultant advisor to leading fintech and financial data firms. He has over 15 years of working experience in the finance field. He runs Advisory Services for Direct Equities and Personal Finance Transformation.
Note – This channel is for educational and training purpose only & any stock mentioned here should not be taken as a tip/recommendation/advice
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