FPIs aggressively chasing these 7 stocks for 12 months through ups & downs

NEW DELHI: Foreign portfolio investors (FPI) have been consistent buyers of seven domestic stocks for 12 months now. Their exposure to these stocks jumped at least 100 basis points consecutively in the last four quarters, data showed.

The list included SBI Life Insurance Company, where FPI exposure stood at 26.4 per cent at the end of December quarter, which was 21.5 percentage points higher than 4.9 per cent reported in December 2018. FPI raised stake in the firm by anywhere between 270 basis points to 920 basis points quarter after quarter. The scrip got listed on October 3, 2017.

In case of battered and bruised Zee Entertainment, FPI holding stood at 67.40 per cent at the end of December quarter against 41.5 per cent in the year-ago quarter. FPI stake in the media stock stood at 48.7 per cent at the end of September quarter, 47.1 per cent at the end of June and 45 per cent at the end of March quarter.

HDFC Life Insurance has seen FPI hike stake by roughly 400 basis points each in December and September quarter and 120-230 basis points in the previous two quarters.


Others such as Indian Energy Exchange, CESC, Shriram Transport Finance Company and ICICI Lombard General Insurance also saw huge FPI buying in last four quarters.

Axis Direct finds SBI Life as the best scalable play in life insurance. Given the strong distribution footprint of its parent SBI, improving protection share, low operating cost ratios and improving margins, this brokerage has a buy recommendation on the stock with a target price of Rs 1,145.

In case of ZEE, the December quarter earnings were its weakest in many quarters, but cheap valuations – still down 40 per cent in one year, despite over 200 per cent rise from 52-week low -- make this stock look attractive. CLSA has maintained a buy on the stock with a target of Rs 360. It said that the stock valuations are compelling at 50 per cent discount to 10-year PE.

On HDFC Life, Geojit sees limited upside from its current levels and has cut its rating to ‘hold’ with a revised target price of Rs 630. Macquarie also thinks that the stock is fully priced.

Emkay earlier this week upgraded Shirram Transport’s rating to ‘buy’ from ‘hold’ earlier, making Shriram its first NBFC upgrade since ILFS crisis.

This brokerage likes the stock on its improving growth and asset quality profile along with easing liquidity scenario and attractive valuations. “We believe Shriram Transport is better positioned to regain lost momentum on growth and profitability front with improving margins and declining credit costs,” it said.

For ICICI Lombard, JM Financial forecast a 23 per cent CAGR in earnings over FY19-22, with a return on equity (RoE) of 22 per cent led by lower corporate tax rate, loss ratio improvement due to focus on profitable segments and benefit of new MV Act. The brokerage has a ‘buy’ rating on the stock with a price target of Rs 1,470. Brokerages Kotak and Motilal Securities have positive views on CESC.