INSUBCONTINENT EXCLUSIVE:
All through September, ICICI Prudential Asset Management Company went around shopping FMCG, PSU, financials, insurance, power and pharma
stocks as the broader market witnessed big ups and downs following a major corporate tax cut.
BSE benchmark Sensex ended the month 4 per
cent higher.
India’s second biggest fund house by asset under management bought over 1 crore shares each in FMCG major ITC and PSU
Shares of these companies are down over 10 per cent each on a year-to-date (YTD) basis till October 9.
The money manager also bought more
than 20 lakh shares each of Axis Bank, Equitas Holdings, Cipla, ICICI Bank, Federal Bank, GAIL (India), NTPC, BHEL, Power Grid and Kalpataru
Power Transmission.
Barring ICICI Bank (up 20 per cent YTD), Kalpataru Power Transmission (up 16 per cent YTD) and Axis Bank (up 9 per cent
YTD), other stocks are down 41 per cent YTD.
Financial stocks are drawing interest again following the recent debt and credit crisis in the
market.
“We are positive on select private banks and insurance counters, including ICICI Bank, HDFC Bank and ICICI Lombard,” said
Siddharth Sedani, Vice President for Equity Advisory at Anand Rathi Shares - Stock Brokers.
Power stocks, which have taken a huge beating
for several months, too are buzzing again.
“Traction in power demand could be a tad softer in the ensuing quarters
We look ahead to the new Electricity Act, which is expected to be introduced in the winter session of Parliament
We maintain our preference for NTPC, CESC and Tata Power,” Edelweiss Securities said.
ICICI Prudential also bought additional shares of IT
majors HCL Technologies (18 lakh), Wipro (5.88 lakh) and Tata Consultancy Services (4.64 lakh).
Country’s largest IT services firm TCS on
Thursday reported a 1.8 per cent rise in consolidated net profit at Rs 8,042 crore for September quarter, which was below Street
expectations.
Haitong Securities has cut the target price for TCS to Rs 1,925 (Rs 2,170 earlier) post Q2 numbers
“We were surprised by the quantum of the miss on both revenue and operating profit margin in Q2,” the brokerage said.
ICICI Prudential
AMC also added Bank of Baroda (16 lakh shares), Punjab National Bank (15.43 lakh shares), LIC Housing Finance (11.50 lakh shares), YES Bank
(7.80 lakh shares), Kotak Mahindra Bank (5.28 lakh shares) and HDFC Bank (4.01 lakh shares) in the financial space.
On the other hand, it
added Bharti Airtel (11 lakh shares) and Vodafone Idea (4.77 lakh shares) from the telecom space
Telecom stocks got a lift on Wednesday after Reliance Jio announced plans to levy a call connect charge on customers, easing the price
pressure on its rivals.
Swiss brokerage UBS said Jio’s move is “a positive development for the sector, with a potential revenue and
Ebitda upside of 10-12 per cent and 35-40 per cent,” since it will result in a higher outgo from the customer.
“If all operators start
charging 6 paise per minute for all outgoing calls, the annual sector revenue and Ebitda can increase by Rs 15,000 crore and Rs 13,000
crore, respectively, although these numbers would trend downwards with gradually balancing (voice) traffic patterns,” UBS said.
The
positive impact on earnings before interest, tax, depreciation and amortization (Ebitda), it said, could be 13-15 per cent for Airtel, 55-60
per cent for Vodafone idea, and 32-36 per cent for Jio.
The fund house has also raised bets on the insurers, including SBI Life Insurance,
General Insurance Corporation of India and ICICI Lombard General Insurance
These stocks have continued to outperform the broader indices amid the NBFC crisis this year.
Emkay Global Financial Services is overweight
on ICICI Prudential (IPRU) and SBI Life Insurance (SBIL)
“The volatility in equity markets and higher surrenders are the key downside risks for IPRU
For SBIL, the reduction in promoter stake to meet the minimum public shareholding (MPS) guidelines (needs 2.1 per cent stake sale by
September 2020) is a key concern,” it added.
In the auto and auto ancillary sector, ICICI Prudential purchased additional 9.77 lakh shares
of Ashok Leyland, followed by Motherson Sumi (6.19 lakh shares), Minda Industries ( 5.49 lakh shares) and Maruti Suzuki (1.34 lakh
shares).
The fund house also checked into Balrampur Chini Mills, Dalmia Bharat, Polycab India, Rail Vikas Nigam and Wheels India
On the other hand, it completely exited Asahi India, Hatsun Agro, Jet Airways, Monsanto, Shalby, Tata Communications and Techno
Electric.
Overall, the fund house increased stakes in as many as 431 companies, and sold in 89 across sectors
It held 550 stocks as of September 30.
Tata Power, SAIL, Larsen - Toubro, SJVN, Hexaware Tech, ONGC, Spice Jet, JSW Energy, Container
Corporation, Infosys, Asian Paints, CESC, Avenue Supermarts, MCX, Coal India, Engineers India and Gujarat State Petronet were among the top
stocks the fund house offloaded during the month.
