India’s biggest money manager increased stake in these stocks; should you follow?

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SBI Mutual Fund, India’s largest fund house by assets, accumulated select PSUs, banks, pharmaceutical firms and some beaten-down names in April when the benchmark BSE Sensex plunged nearly 1.5%.

Data available with Ace Mutual Fund showed that the money manager picked up additional over 50 lakh shares each in Power Grid of India, Bharat Electronics, Bank of Baroda and Hindalco. Brokerages are also bullish on a couple of stocks in which SBI Mutual Funds increased its stake.

For instance, ICICI Securities maintained a ‘Hold’ rating on Hindalco with a revised target of Rs 417 (Rs 270 earlier). “With most of the volume and margin upsides, from Novelis, in the estimates, the story of Hindalco will pivot back to LME and its volatilities,” the brokerage said. Metal stocks have been buzzing on Dalal Street due to rising prices of the commodity in the international market.

According to SBI Mutual Fund, the progress on the second wave, associated economic restrictions and the pace of vaccination remain the key monitorable on the domestic front in the near term. However, as sentiment shifts from hope to despair, the fund house in its monthly outlook said the correction provides a good entry opportunity for long term investors.

Banking stocks

SBI Mutual Fund also lapped up further 44 lakh shares in City Union Bank and 29 lakh shares in ICICI Bank. It also acquired over 10 lakh shares in State Bank of India (SBI), HDFC Bank and Axis Bank.

JM Financial is positive on SBI with a target of Rs 375-386. “State Bank of India is India’s largest bank with around 20% market share in deposits and loans. We believe the bank’s strong deposit franchise, strong market positioning, well-diversified asset book and large distribution network are key strengths, which position it well,” JM Financial said.

Big names

Tata Motors, Vodafone Idea, Infosys, Wipro, Adani Ports, Cadila Healthcare, National Aluminium, Reliance Industries, HDFC, Canara Bank, Vedanta, Phoenix Mills, HCL Technologies, Lemon Tree Hotels, Kotak Mahindra Bank, Max Healthcare Institute, Indian Oil Corporation and ICICI Lombard General Insurance stood among other prominent names in which it upped stake last month.

Some of this buying and selling could have happened due to changes in the composition of the benchmarks tracked by passive funds.

SBI Mutual Fund also took fresh positions in Amara Raja Batteries, Barbeque Nation, Cera Sanitaryware, Fortis Healthcare, Hindustan Copper, L&T Finance Holdings, Mahanagar Gas, Minda Industries and Fortis Healthcare. On the other hand, it exited Gabriel India and Mayur Uniquoters.