Team Prashant Jain grabs TaMo, Nifty biggies; may have sold SBI at wrong time


NEW DELHI: HDFC Mutual Fund bought Tata Motors shares with both hands in January, along with some midcap non-banking financial companies even as the fund house dumped some of the biggest names from the Nifty50 index.

The fund management team led by Prashant Jain pounced on Tata Motors, buying 2.47 crore shares of the automaker. The stock has gained momentum in the past couple of months thanks to better-than-expected performance and a possible deal with Tesla.

The fund house also bought 10-95 lakh shares of NHPC, M&M Financial Services, Sun Pharma, BHEL, Lupin, Equitas SFB, Jindal Steel and Power and Coal India in hopes of a solid boosted for these companies from a domestic economic recovery.

Jain believes despite the equity market surging rapidly, stock valuations are not excessive. In fact, some pockets offer a good opportunity to enter, as they are still depressed compared with their historical averages.

Last month, speaking at an ETMarkets event, Jain indicated that reversion to mean could now play out in the segments with depressed valuations, which include sectors like metals, consumer electricals, power, tobacco and others.

The January shopping cart of HDFC Mutual Fund somewhat reflected these beliefs. At the same time, the star money manager did not shy away from dumping big names from the largecap space, especially the names that seem to have run the course in the recent rally.

The fund house sold 5.22 crore shares of PowerGrid and 1.49 crore shares of . The sell-off in the latter apparently proved ill-timed, as the stock climbed rapidly after Budget and earnings.

Analysts have since turned extremely bullish on the top PSU lender, as its management expressed confidence that it would come out virtually unscathed from the pandemic. Some analysts have revised price targets for the stock by as much as 80 per cent post December quarter earnings.

Brokerage Macquarie Capital Securities said, “the elephant has started dancing.” The brokerage said it has “increased confidence in SBI’s asset quality and balance sheet,” and believes the bank is on track to hit its target of 1 per cent return on assets as credit costs normalise.

Among other largecap stocks, the fund house sold off 27-97 lakh shares of Infosys, ICICI Bank, GAIL, ONGC, Ambuja Cement, Tata Steel, Hindalco Industries and Wipro during the month. Besides, it also trimmed stakes in KNR Construction, SpiceJet, Power Finance Corporation and Gujarat Pipavav.

Some of the buying and selling could have happened in the passive funds, which go for such changes every time the composition of the benchmarks they tracked gets altered.

The leading fund house completely exited Angel Broking, BL Kashyap & Sons, IFB Industries, L&T Infotech, Nalco, SRF, Technocraft Industries (India) and Torrent Power.

At the same time, it took fresh positions in Akzo Nobel India, Bharat Forge, Dr Lal Pathlabs, Indian Railway Finance Corporation, Indigo Paints, Lumax Industries, MRF and Techno Electric & Engineering.

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