In atleast 30 stocks, mutual funds have increased their stake consistently in the last three quarters, and their bullish stance alongwith the positive market sentiment saw around 11 of them giving multibagger returns in the last 10 months.

What’s also interesting to note is that all the 30 companies have reported atleast 20% year-on-year (YoY) growth in revenue and profit in the December quarter.

Barring two companies – Balrampur Chini Mills and Shree Cement – rest of the stocks have given atleast double-digit returns so far in the current financial year.

In some of the companies, mutual funds have nearly doubled down their stake, and these are FSN E-Commerce, Electronics Mart, Kaynes Technology, Marksans Pharma, Five Star Business Finance, and IIFL Finance.

In FSN E-Commerce, which owns the popular beauty products brand Nykaa, MF holding has gone up to 10.85% in the December quarter, from 5% in the March quarter. The stock has given over 20% returns so far in the current financial year.

MFs’ bullish sentiment increased quarter after quarter in Kaynes Technology, and they cumulatively held 15.50% stake in the IoT solutions-enabled integrated electronics manufacturer at the end of December quarter. In March last year, they were holding a little over 8% stake. This stock has given healthy returns of more than 200% so far in FY24.

Another electronics manufacturer stock to see a steady rise in the ownership of mutual funds was Dixon Technologies. MFs held 17.4% stake in the multibagger stock as of December end, compared to 12% in March 2023.

Yet another multibagger stock to see consistent rise in MF holding was drugmaker Marksans Pharma. The domestic bulls increased their stake to 3.82% at the end of December, from a mere 0.9% in March 2023.

InterGlobe Aviation, India’s largest air carrier which runs IndiGo also saw consistent rise in MF holding over the last three quarters. MFs held a 12.3% stake in the airline firm at the end of December, compared to 8.3% in March 2023.

What should investors do?

Many of the above-mentioned stocks where mutual funds have raised their stake are those inclined towards the domestic economy, suggesting that the big bulls are indirectly betting on the India growth story.

Asset managers remain bullish on the long-term prospects of India given the government’s focus on driving capital investments, boost infrastructure, and bring about game-changing reforms, all of which could help make us the third largest economy in the world from the current fifth position.

As India leapfrogs to become the third largest economy in the world, Nitin Agarwal of Torus ORO PMS expects significant growth in categories such as travel, healthcare, out-of-home consumption, branded goods, leisure, and recreation.

“With Prime Minister Narendra Modi’s strong showing, investors can now anticipate continued stability and a focus on growth-oriented policies. We strongly believe in India’s growth story and would advise investors to have a significant exposure towards equities without taking a short term view,” Agarwal said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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