With the stock markets remaining highly choppy in the last six months, benchmark outperformers Infosys and TCS have gained the favour of mutual fund managers. While the Sensex has given negative returns in the last 6 month period, TCS shares have returned more than 32% since April this year. Mutual funds have raised their stake in the firm.
Out of 10 AMCs, 6 mutual funds have raised their stake in TCS in the last six month period, data sourced from Value Research showed. Notably, mutual funds including SBI Mutual Fund , Axis Mutual Fund, UTI Mutual Fund, Kotak Mutual Fund, Motilal Oswal Mutual Fund and Tata Mutual Fund have raised stake in TCS. SBI Mutual Fund and Axis Mutual Fund now own 0.505% and 0.364% of TCS’s equity capital respectively.
In case of IT bellwether Infosys, six mutual funds have increased stake in the shares, as compared with their holdings as at the end of March. HDFC Mutual Fund, SBI Mutual Fund, ICICI Prudential Mutual Fund, UTI Mutual Fund, Aditya Birla Sun Life Mutual Fund, Kotak Mahindra Mutual Fund and DSP Mutual Fund have raised their stake in the funds. HDFC Mutual Fund, SBI Mutual Fund, ICICI Prudential Mutual Fund collectively hold more than 6.14% of the equity capital in the company. The depreciating currency also helped the cause of IT giants Infosys and TCS in the last six months. A recent report by global firm Global brokerage Macquarie said that there are currency tailwinds in an improving growth environment in case of the sector.
“While the industry is secularly a winner in terms of absolute earnings as the rupee depreciates, relative benefits are another story altogether. Three key aspects will determine the extent to which a company’s earnings are sensitised to currency fluctuations: mix of USD revenue bookings among other currencies, extent of onsite-offshore revenue mix – that will determine the net exposure after natural hedge and the hedging policy in terms of duration and proportion of the net exposures hedged,” Motilal Oswal said in a recent report.