India’s largest mutual fund bought these stocks in August; do you own any?

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Country’s biggest mutual fund SBI Funds Management was on a shopping spree in August as it lapped up a couple of underperformers and select midcap and smallcap stocks from Dalal Street. The latest data available with Ace Mutual Fund showed that the money manager lapped up additional 1.70 crore shares of FMCG major ITC. The money manager held 34.77 crore shares as of August 31 against 33.07 crore shares in July. Shares of ITC have gained 3.37% on a year-to-date basis (YTD). On the other hand, the 30-share index has advanced 22% YTD.

Overall, the bull stood in favour of larcaps last month. The benchmark NSE Nifty index exceeded the 17,000-mark in August 2021 to reach a record high, after remaining muted over the last two months. It ended 8.7% higher month-on-month in August 2021 to close at 17,132. The rally was driven by positive Asian cues, strong inflows by institutional investors and a good end to the Q1FY22 corporate earnings season. The BSE Sensex advanced 9.44% to 57,552 during the month. On the other hand, broader indices BSE Midcap and BSE Smallcap gained 3.31% and 0.50%, respectively.

SBI Funds Management also bought over 20 lakh shares each in Ashok Leyland, DLF, HCL Technologies, Tata Power, Tata Motors, Kotak Mahindra Bank, Axis Bank, SBI Life Insurance Company, Equitas Holdings, Infosys, NTPC, HDFC Bank, Bharti Airtel, ICICI Bank, GAIL (India) and NHPC. Barring Kotak Mahindra Bank (down 6.41% YTD), other stocks in the list gained between 3% and 87% YTD.

From an investment perspective, Ashika Stock Broking is positive on HCL Technologies with a target price of Rs 1,390. “Indian IT companies are positioned well to reap benefits as spending on technology in the next decade is expected to be more than in the previous two decades,” the brokerage said. On the other hand, Angel Broking is bullish on Ashok Leyland with a target price of Rs 158.

“Demand for MHCV was adversely impacted post peaking out due to multiple factors including changes in axel norms, increase in prices due to implementation of BS 6 norms followed by a sharp drop in demand due to the ongoing Covid-19 crisis. While demand for the LCV segment has been growing smartly post the pandemic, demand for the MHCV segment has also started to recover over the past few months before the second lockdown. We believe that the company is ideally placed to capture the growth revival in the CV segment and will be the biggest beneficiary of the government’s voluntary scrappage policy and hence rate the stock a ‘Buy’,” Angel Broking said.

Coming back to the other major changes in the portfolio, SBI Mutual Fund also invested in initial public offers including Chemplast Sanmar, Krsnaa Diagnostics, Nuvoco Vistas. It also added Indiamart Intermesh, Polycab India, Rolex Rings, Syngene International and Oberoi Realty as fresh entrants in the portfolio. On the other hand, it completely exited players like Allcargo Logistics, Metropolis Healthcare, PNC Infratech and Shanthi Gears.