1. MFs bring down exposure to blue-chip firms in Q3

MFs bring down exposure to blue-chip firms in Q3

Mutual funds brought down their exposure to some of the leading blue chip companies during the quarter ended December 2015.

By: | Mumbai | Published: February 10, 2016 12:28 AM

Mutual funds brought down their exposure to some of the leading blue chip companies during the quarter ended December 2015.

According to data compiled by Capitaline, MFs substantially cut their holding in ITC ( by 10.88 percentage points) and Maruti Suzuki (2.02 ppt) during the quarter.

The reduction in their ownership in ITC comes at a time when the tobacco company is witnessing a consistent decline in volume growth on the back of unfavourable tax policy on cigarettes. During three months to December 2015, ITC reported below-expected growth in its revenue and net profit, while the underlying volume growth of 5% was against analysts’ expectations of 6-7%.

Maruti Suzuki India, which during the quarter announced that its shareholders had approved its proposal on resting the ownership of the Gujarat plant with its Japanese parent, saw mutual funds taper their ownership substantially.

The Street, in general, was also disappointed by the car marker’s Ebitda margin during Q3FY16 which dropped to 14.7% from 16.7% in the previous quarter on account of higher discounts and inventory corrections.

Mutual funds have also trimmed their stake in Idea Cellular (by 35 basis points), M&M (33 bps), Wipro (30 bps) and NTPC (26 bps).

In the last one year, they reduced their holdings in stocks such as BPCL and Lupin that have outperformed the benchmark indices, by anywhere between 50 and 100 bps.

Domestic fund managers seem to have taken advantage of falling stock prices of private sector banks and defensive pharma companies and increased their exposure.

Mutual funds have increased their stake in stocks such as Yes Bank, IndusInd Bank, HDFC Bank, and Axis Bank between 47 and 136 basis points.

Their holding in Sun Pharma jumped by 71 bps and 217 bps respectively over the last one quarter and one year, respectively.

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