The country’s largest institutional investor, Life Insurance Corporation of India (LIC), went on a shopping spree in the June quarter, when the benchmark equity index BSE Sensex fell more than 9% due to inflation uncertainty and outflows by foreign institutional investors. According to data from corporate database Ace Equity, the insurance behemoth increased its stake in at least 78 firms in the BSE 500 index during the previous quarter. As of June 30, 2022, it held more than 215 stocks in the broader index.
LIC invested in companies from a variety of industries. For example, it increased its stake in consumer durables company Voltas to 6.57 percent in the June quarter, up from 4.71 percent in the previous quarter ended March 31. The domestic institutional investor also increased its stake in Aarti Industries to 6.61 percent from 4.84 percent previously. Aarti Industries and Voltas shares underperformed the headline indices in the June quarter, falling more than 20% each.
The insurance company appears to be bullish on the cement industry as well. According to data, LIC increased its stake in Ramco Cement (to 8.29 percent from 6.84 percent), Shree Cement (to 3.01 percent from 2.39 percent), UltraTech Cement (to 4.65 percent from 4.42 percent), and Ambuja Cement (to 4.65 percent from 4.42 percent) (to 6.33 per cent from 6.30 per cent). On the other hand, it increased its financial stake in Union Bank of India, ICICI Bank, Kotak Mahindra Bank, and State Bank of India.
Dolat Capital Market has a target price of Rs 8,077 on UltraTech Cement. “UltraTech reported revenue and volume in line, but realisation, EBITDA, EBITDA per tonne, and adjusted profits after tax were higher than expected.” We maintain our estimates for FY23E and FY24E in general. We anticipate 13.5%, 12.4%, and 19% revenue, EBITDA, and adjusted PAT CAGRs over FY22-24E, driven by 9.6% and 10.7% volume growth and 6.3%/flat realisation growth in FY23E/FY24E,” it added.
Mindtree, Dixon Technologies, HDFC AMC, Welspun Corp, Deepak Nitrite, and Aditya Birla are among the companies represented. LIC increased its holdings in Sun Life AMC, Capri Global, Info Edge, Dr Reddy’s Lab, IGL, Colgate, JSW Steel, CAMS, Tata Consumer Products, ACC, Wipro, HDFC, TVS Motor, Infosys, Adani Total Gas, L&T, Pfizer, Astral, Godrej Agrovet, HCL Technologies, TCS, Hero MotoCorp, CESC, Adani Enterprises, Bharti Airtel, Zy
Nirmal Bang Securities rates HDFC AMC as ‘Accumulate,’ with a target price of Rs 2,132. “The company has shown an increase in market share in net flows.” A sustained increase in net flows, market share, and investment performance should produce favourable results. HDFC AMC remains committed to new product launches. In addition to launching new MF products, it is expanding its AIF offerings. Given the current market volatility, we would wait for a more sustained improvement in revenue yields, as well as an improvement in asset mix,” it said.
