Funds Changed Course in Jan, Stocked Up on Big Guns Again

Most of them were out of favour over the past few years due to sec­toral head­winds; MFs in­vested 10k cr-33k cr in these stocks

The Economic Times - - Smart -

ET In­tel­li­gence Group: In­dex heavy­weights such as HDFC Bank, ICICI Bank, State Bank of In­dia (SBI), Larsen & Toubro (L&T), and ITC have again caught the at­ten­tion of lead­ing fund man­agers, shows the data on mu­tual funds port­fo­lio for Jan­uary. They in­vested be­tween ₹ 10,000 crore and ₹ 33,000 crore in these stocks dur­ing the month.

This marks a shift in the strat­egy since most heavy­weights were out of favour over the past few years. Ris­ing bad loans in case of banks, un­cer­tainty over the ex­cise duty on cig­a­rettes and their stag­nat­ing vol­ume for ITC, and slug­gish­ness in the or­der book for cap­i­tal goods com­pa­nies were some of the ad­verse fac­tors. These com­pa­nies are now emerg­ing as value in­vest­ments since fund man­agers be­lieve con­di­tions look favourable. For in­stance, cig­a­rette ma­jor ITC re­ported bet­ter-than-ex­pected vol- umes in the De­cem­ber quar­ter with mod­er­ate in­crease in unit sales price. In ad­di­tion, lesser-than-ex­pected ex­cise duty in­crease of 6% in the Bud­get helped in at­tract­ing in­vestors. ITC’s stock has con­trib­uted 12.5% to the to­tal Nifty move­ment since Jan­uary 1.

In case of top bank­ing stocks, im­prove­ment in net in­ter­est in­come, growth in cur­rent ac­count and sav- ings ac­count (CASA) on a year-onyear com­par­i­son and im­prove­ment in as­set qual­ity were key pos­i­tives. These fac­tors prompted fund man­agers to en­hanced ex­po­sure in SBI and ICICI Bank. L&T’s or­der in­flows grew by 3% to ₹ 95,700 crore in the first nine months of FY17. The com­pany’s or­der pipe­line is worth ₹ 80,000 crore. It ex­pects to re­tain mo­men­tum in the fourth quar­ter of the fis­cal. For Maruti Suzuki, sales vol­ume grew by 3.5% year-on-year in the De­cem­ber quar­ter re­flect­ing lesserthan-ex­pected im­pact of de­mon­eti­sa­tion. The com­pany’s new mod­els have re­ported bet­ter trac­tion among cus­tomers, which is ex­pected to sup­port the fu­ture vol­ume growth.

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