NEW DELHI: The buy-sell data of SBI Mutual Fund for March shows a shift in portfolio allocation to one quarter of public sector companies from another amid a cyclical shift in the economy.
The buying pattern showed India’s largest fund house continues with its policy of banking on re-rating candidates. Now, it is also betting on the rising energy consumption of Indians.
Data available for the month showed fund managers at SBI MF bought 3.04 crore shares of Power Grid Corporation. Apart from that, it also bought 1.12 crore shares of Bharat Petroleum and 83 lakh shares of Tata Consumer even as it continued to add to its position on SAIL, with the purchase of another 32 lakh shares.
SAIL shares have been in heavy demand recently, as steel companies hiked prices on the back of a rise in commodity prices and heightened demand. In the last one year, the scrip has gained 235 per cent. Some analysts say it is too late for an investor to get into metals.
“The next few quarters look very positive for the steel industry globally. But I do not think the risk-return ratio is that favourable at this point. The best part of the gains have already been captured in the stock price,” said Dipan Mehta, Director, Elixir Equities.
SBI MF also bought 10-23 lakh shares of Gujarat State Petronet, SBI Cards and Payment Services, Vedanta, Muthoot Finance, Tata Power Company and AIA Engineering during the month.
The fund house remained bullish on the market, as it believes starting at multi-decade lows on corporate profits-to-GDP for Indian corporates, there is reason to be optimistic on an uptick in earnings cycle over the next few years.
“Beyond bouts of short-term volatility, this should continue to be supportive of equities. The bigger theme, however, continues to be bottom-up stock picking, as the deflationary forces of the past decade waned and the accompanying market polarizations continued to reverse, leading to a different set of winners,” the fund house said in its monthly outlook.
The two key risks for the equity market amid an intensified second wave of Covid and continued surge in global yields have materialised together over the past few weeks, the fund house said.
The top stocks that SBI MF money managers sold in March, too, were government-owned firms. They dumped 2.6 crore shares of gas explorer GAIL, even as analysts turned bullish on growth of gas distribution in the country.
The fund house also disposed of 20-42 lakh shares of Bank of Baroda, SBI, NTPC, BHEL, Techno Electric & Engineering Company, ITC, Axis Bank, Bandhan Bank, ONGC, Hindalco and Torrent Power.
Some of these buying and selling could have happened due to changes in the composition of benchmarks that are tracked by passive funds.
SBI Mutual Fund also took fresh positions in Adani Enterprises, AU Small Finance Bank, Barbeque-Nation Hospitality, CESC, Granules India, Jindal Steel & Power, Laxmi Organic, Max Healthcare Institute, Nazara Technologies, Trent, Wabco India and Yes Bank.
At the same time, it exited Dr Lal Pathlabs, Rites, Tamil Nadu Newsprint & Papers and V2 Retail.
