Prashant Jain-led HDFC MF sells RIL, D’Mart, top banks; exits Voda Idea, DLF

HDFC Asset Management, India’s second-largest mutual fund house by assets, topped up outperformers from IT, pharma, telecom and cement sectors in July, as the benchmark Nifty advanced 7.50 per cent.

The AMC bought 6 lakh to 39 lakh additional shares each in Wipro, Infosys, HCL Technologies, Sun Pharmaceuticals, Tata Steel, Lupin, Bharti Airtel and Ambuja Cement. Besides, it also acquired substantial shares of Central Depository Services amid reports of a big spike in new demat account openings.

The AMC's investment team led by market veteran Prashant Jain sold shares in large quantities in Reliance Industries, HDFC Bank, Aurobindo Pharma, Adani Ports, ITC, Axis Bank and SpiceJet, among others, and completely exited Vodafone Idea, DLF, ICICI Prudential Life.

Barring Tata Steel (down 12 per cent YTD), other stocks have advanced between 14 per cent and 60 per cent in 2020 till August 11. BSE benchmark Sensex is still down 7 per cent on a year-to-date basis.

Nilesh Shah, MD, Kotak AMC, says he likes pharma and IT pockets. “These sectors may continue to outperform in the near term. People are worried about the economy and they will look towards the safety of IT, pharma and FMCG kind of sectors,” he told ETNOW during his latest interaction.

He said most IT and pharma players have lesser leverage and hold slightly robust cash on the balance sheets, which will help them survive the downturn. These sectors are also poised to see pickup in growth in the days to come, he said.

HDFC Mutual Fund’s other major buys in July were from real estate, chemicals, infrastructure, metals and aviation sectors. The stocks included Rites, Apollo Tyres, Cipla, Can Fin Homes, Exide Industries, Tata Chemicals, HPCL, United Breweries, HPCL, Muthoot Finance, Dilip Buildcon, Mishra Dhatu Nigam, Bharat Dynamics, JSW Steel and InterGlobe Aviation, among others.

The fund house added 1 to 5 lakh additional shares of these companies during the month.

The BSE Metal index has risen 10 per cent in last eight sessions on hopes of recovery in the global market.

Commenting on the sector, Ajit Mishra, VP for Research at Religare Broking, said expectation of faster economic recovery due to likely stimulus is driving the sector. “Support from central banks and governments has led to the demand revival in this space,” he said.

In the largecap space, the fund house added shares of TCS (50,203 shares), HDFC (34,552 shares), SBI Cards (84,000 shares), Divi’s Labs (17,600 shares), Titan (20,200 shares), Eicher Motors (1,891 shares) and Hindustan Unilever (14,114 shares).

Overall, HDFC AMC increased stake in at least 67 companies during the month, even as it cut stakes in 92.

On the sell side, the fund house offloaded shares of select public and private sector banks. Among the stocks the fund house sold included PNB, Reliance Industries, Bharti Infratel, Bharat Petroleum Corporation, Hindalco Industries, HDFC Bank, Aurobindo Pharma, Adani Ports, ITC, Axis Bank, Union Bank of India and SpiceJet. The fund house offloaded 10-94 lakh shares on these counters.

It also sold over 5 lakh shares each in BPCL, HPCL, Federal Bank, Voltas, McLeod Russel, Avenue Supermarts, Adani Power, ICICI Prudential Life, Repco Home and Tata Power.

Data available with Ace Mutual Fund showed that the fund house completely exited APL Apollo Tubes, Arti Surfactants, DLF, ICICI Prudential Life, M&M Financial Services, NCC, Tejas Network and Vodafone Idea.

Instead, the fund house bought afresh shares of Hindustan Aeronautics, ICICI Lombard, Jubilant FoodWorks, Mphasis, Rossari Biotech, Shriram Transport (Rights Entitlements) and Syngene International.