5 Mid-cap Stocks with High Mutual Fund Holding
7 min read . Updated: 19 Oct 2022, 12:24 PM IST
Premium- Come hell or high water, these are top Indian mid-cap stocks which mutual funds never sell.
Mutual funds are a great source for picking stocks. With their decades of investment experience, there's a high chance that mutual funds may have already invested in the stocks you'd like to buy.
The fund managers choose stocks from diverse industries and sectors to beat the benchmark indices. This can be seen by looking at the top performing midcap stocks in mutual funds.
Keeping that in mind, here's a list of top mutual fund favourite midcap stocks.
#1 Indian Hotels Company
When we talk about hotels in India, it is impossible not to mention the name of Tata group’s Indian Hotels Company (IHCL).
IHCL is India’s hospitality company that manages a portfolio of hotels, resorts, jungle safaris, palaces, spas and in-flight catering services. The company is part of India's Tata Group.
Taj, Vivanta, and Ginger, all of these reputed, elegant hotels, are owned by IHCL.
Tata group has remained mutual fund’s favourite mid-cap stock for a long time. So this should not come as a surprise.
For the quarter ended June 2022, mutual funds hold a stake of 22.5% in IHCL. The September 2022 quarter shareholding is not out yet.
Mutual Fund Holding in Indian Hotels
Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 19.6 18.7 18.1 21.4 22.5 Qtr. Ending Mutual Funds Holding %
Data Source: Ace Equity
Coming to why mutual funds are bullish on the company, the hospitality sector was one of the worst-hit sectors of the economy. A clear impact of Covid-19 can be seen on the IHCL business and other hotel companies. IHCL has reported losses for fiscal years 2021 and 2022.
However, on a positive note, the revenues of IHCL have been gradually improving, as the fear of covid-19 eased out in the country. Resultantly, losses have narrowed.
Financial Position
41,748.1 45,989.8 45,955.6 17,398.8 32,113.8 2.2% 10.2% -0.1% -62.1% 84.6% 7,416.1 91,67.1 10,999.5 -1,970.4 5,599.1 17.8% 19.9% 23.9% -11.3% 17.4% 632.3 2,445.9 3,507.7 -6,942.1 -2,224.0 1.5% 5.3% 7.6% -39.9% -6.9% Particulars ( ₹in m) FY18 FY19 FY20 FY21 FY22 Total Income Growth Operating profit Operating profit margin Net profit Net profit margin
Source: Equitymaster
#2 Bharat Electronics
Bharat Electronics (BEL) is an Indian Government-owned aerospace and defence electronics company. It primarily manufactures advanced electronic products for ground and aerospace applications.
BEL engages in the manufacturing of specialised electronic equipment requirements of the Indian Defence Services.
BEL is one of nine PSUs under the Ministry of Defence of India. It has been granted Navratna status by the Government of India.
For the quarter that ended June 2022, mutual funds hold a significant stake of 15.9% in Bharat Electronics.
Mutual Fund Holding in Bharat Electronics
Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 14.1 15.7 17.2 16.8 15.9 Qtr. Ending MINT PREMIUM See All Mutual Funds
Data Source: Ace Equity
Bharat Electronics’ sales had almost halved in the covid-19 year but are gradually improving.
For the financial year 2021-22, its total revenues were ₹156,219.9 m, which is 9.5% higher compared to last year.
On a CAGR basis, over the past 5 years, its total revenues have grown by 11.3%.
The company’s profit margins are quite high. The lowest reported profit margin in the past five years is 13%.
On a CAGR basis, in the last five years, its operating profits and net profits have grown by 10.1% and 9.5%, respectively.
Financial Position
108,530.2 123,789.4 132,983.5 142,623.1 156,219.9 18.4% 14.1% 7.4% 7.2% 9.5% 22,351.1 29,824.0 28,579.2 33,387.1 35,759.2 20.6% 24.1% 21.5% 23.4% 22.9% 14,072.5 18,480.3 17,926.3 20,693.4 23,544.6 13.0% 14.9% 13.5% 14.5% 15.1% Particulars ( ₹in m) FY18 FY19 FY20 FY21 FY22 Total Income Growth Operating profit Operating profit margin Net profit Net profit margin
Source: Equitymaster
#3 Sona BLW Precision
Sona BLW Precision (Sona Comstar) manufactures precision forged bevel gears, differential case assemblies, and synchroniser rings for automotive and other applications.
It has five manufacturing plants, three in Gurgaon, one in Manesar, and one in Pune.
The company acquired 100% of Comstar Automotive Technologies (CATPL) in July 2019. Both entities are in the process of being merged.
CATPL manufactures starter motors, starter motor kits, and alternators for automotive applications. Its manufacturing facilities are spread across Chennai (India), Tecumseh (US), Hangzhou (China), and Irapuato (Mexico).
For the quarter that ended June 2022, mutual funds hold a high stake of 15.9% in Sona BLW Precision.
Mutual Fund Holding in Sona BLW Precision
Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 14.4 14.2 14.2 14.2 21.0 Qtr. Ending Mutual Funds
Data Source: Ace Equity
Sona BLW Precision’s financials performance have been volatile. It revenues and profits have not been stable. However, they have not fallen low enough to be a sign of concern as well.
On a CAGR basis, over the past 5 years, its total revenues have grown by 36%.
The company’s profit margins are quite high. The lowest reported profit margin in the past five years is 12.2%.
On a CAGR basis, in the last four years, its operating profits and net profits have grown by 32% and 47%, respectively.
Financial Position
6,259.2 8,152.3 10,437.7 15,686.4 21,506.7 NA 30.2% 28.0% 50.3% 37.1% 1,931.5 3,160.0 2,480.6 4,433.6 5,791.3 30.9% 38.8% 23.8% 28.3% 26.9% 764.5 1,729.6 3,603.4 2,151.7 3,615.4 12.2% 21.2% 34.5% 13.7% 16.8% Particulars ( ₹in m) FY18 FY19 FY20 FY21 FY22 Total Income Growth Operating profit Operating profit margin Net profit Net profit margin
Source: Equitymaster
#4 TVS Motor Company
TVS Motor (commonly known as TVS) is an Indian multinational motorcycle manufacturer headquartered in Chennai, Tamil Nadu.
It is the third-largest motorcycle company in India. It is the second largest two-wheeler exporter in India with exports to over 60 countries.
The company is a member of the TVS Group and is the largest company in the group in terms of size and turnover.
It has an annual production capacity of 4 m two-wheelers and 1.2 lakh three-wheelers.
For the quarter that ended June 2022, mutual funds hold a high stake of 15.9% in TVS Motors.
Mutual Fund Holding TVS Motor
Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 15.8 15.7 15.8 17.5 19.8 Qtr. Ending Mutual Funds
Data Source: Ace Equity
On a CAGR basis, over the past 5 years, its total revenues have grown by 14.1%.
It is noteworthy that even though sales had fallen in the financial year 2020 there were no losses. Profits dipped but only marginally.
On a CAGR basis, in the last five years, its operating profits and net profits have grown by 21.9% and 7.4%, respectively.
Financial Position
164,398.6 201,854.3 189,011.4 194,680.4 243,881.8 30.2% 22.8% -6.4% 3.0% 25.3% 16,420.6 21,862.6 23,248.8 22,850.5 27,875.0 10.0% 10.8% 12.3% 11.7% 11.4% 6,642.1 7,237.0 6,553.9 6,152.5 7,283.9 4.0% 3.6% 3.5% 3.2% 3.0% Particulars ( ₹in m) FY18 FY19 FY20 FY21 FY22 Total Income Growth Operating profit Operating profit margin Net profit Net profit margin
Source: Equitymaster
#5 Cummins India
Cummins, designs, manufactures and sells diesel and alternative fuel engines, generators, and related accessories. It also provides after-sale services.
The company has a strong domestic presence. Being a part of Cummins USA, it also has a global presence and exports to the USA, UK, Mexico, China, and Singapore.
Cummins India serves over 225 thousand customers through a network of more than 120 dealers.
For the quarter that ended June 2022, mutual funds hold a high stake of 15.9% in TVS Motors.
Mutual Fund Holding in Cummins India
Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 16.5 16.2 16.9 19.0 19.0 Qtr. Ending Mutual Funds
Data Source: Ace Equity
Cummins India sales financial improved in the financial year 2022. The sales grew by a whopping 38.6% in the said year.
On a CAGR basis, in the last five years, its operating profits and net profits have grown by 3.7% and 5.2%, respectively.
Financial Position
52737.8 59368.1 54500.5 46361.9 64252.7 0.4% 12.6% -8.2% -14.9% 38.6% 8942.2 11041.2 8466.7 8558.3 11312.5 17.0% 18.6% 15.5% 18.5% 17.6% 6260.4 6499.7 5833.5 5219.1 8425.9 11.9% 10.9% 10.7% 11.3% 13.1% Particulars ( ₹in m) FY18 FY19 FY20 FY21 FY22 Total Income Growth Operating profit Operating profit margin Net profit Net profit margin
Source: Equitymaster
Tracking Mutual Fund Activity using Equitymaster’s Indian Stock Screener
Since you’re interested in tracking mutual fund buying and selling activity, check out Equitymaster’s Indian stock screener.
This tool keep track of what Indian mutual funds are buying and what mutual funds are selling.
Investment Takeaway
Mutual funds provide a lot of information about the stocks they hold and what is their view on these stocks.
They have better information about a company's fundamentals and growth potential to pick stocks rather than retail investors. They also analyse company's financial and operating performance to decide whether stocks are undervalued or fully valued.
Hence following the footsteps of mutual funds while making investment decisions may turn out to be profitable, because mutual funds have already performed all the difficult tasks of analysing a stock.
Happy Investing!
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com
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