The month of March saw the Nifty 50 index slip to its lowest point in the last six months to below 16,000 and then surge to cross 18,000 levels in the next two weeks. While foreign institutional investors (FIIs) were net sellers during the month, domestic institutional investors (DIIs) continued to buy stocks using the advantage of the lower prices. In the midst of this, Indian mutual fund managers found opportunities across large as well as small-cap stocks.

This screener shows stocks where mutual funds increased their holdings in March 2022. Fund managers had their eye on a hospitality company, a few pharmaceutical firms, an insurance company as well as a kitchen appliances manufacturer.

Indian Hotels - Strong demand back with unlocking across the world

Indian Hotels is a Tata Group company with iconic brands like ‘Taj’ hotels in its portfolio. Its stock price more than doubled over the last year. The rise in its stock price can be attributed mainly to the “unlock” theme, which is going to dictate hotel companies’ stock prices in the medium to long term. Key triggers include the ongoing IPL 2022 season, destination weddings, and corporate events that have fueled a rise in room rates of 15-25% against pre-Covid levels.

The occupancy in leading hotels in India is around 85-95%, with some northeast hotels reportedly fully booked till May 2022. With travel back on the agenda of many people, the hospitality industry can expect better times ahead.

Fund Managers who increased their holdings in Indian Hotels

Schemes where fund managers increased their holdings include Shridatta Bhandwaldar for Canara Robeco Emerging Equities Growth, Kinjal Desai and Ashutosh Bhargava for Nippon India Tax Saver (ELSS) Fund - Growth, Jinesh Gopani for Axis Long Term Equity Fund Growth and Shreyash Devalkar and Hitesh Das for Axis Midcap Fund Growth schemes respectively.

Ambuja Cements - Cementing the infrastructure growth story

With the government's push for infrastructure development, cement companies are direct beneficiaries and the trend in sales reflects the same. Over the last few quarters, the operating revenues of Ambuja Cements grew consistently with Q3FY22 revenues being the highest in the last 10 quarters at Rs 3,735.1 crore. Demand is higher than the pre-pandemic levels and there is room for further growth in the current financial year.

Fund Managers who increased their holdings in Ambuja Cements

Fund managers who bought Ambuja for their schemes include Dinesh Ahuja and Dinesh Balachandran for SBI Balanced Advantage Fund Regular Growth, Krishan Kumar Daga and Arun Agarwal for HDFC Arbitrage Fund Wholesale Plan Growth, Venugopal Manghat and Praveen Ayathan for L&T Arbitrage Opportunities Fund Regular Growth and Mohit Jain and Dinesh Balachandran for SBI Contra Fund Regular Payout Inc Dist cum Cap Wdrl.

HDFC Life - Rising customer awareness drives sales for new launches

HDFC Life is a life insurance company part of the HDFC Group. One key development in Q3FY22 was the completion of the Exide Life Insurance acquisition, announced on September 3, 2021. Approvals from regulators IRDAI (Insurance Regulatory and Development Authority of India) and the CCI (Competition Commission of India) came in record time. Exide Life became a 100% subsidiary of HDFC Life with effect from January 1, 2022. 

In the last two quarters, a newly-launched product ‘Sanchay FMP’ in the deferred annuity segment generated sales of more than Rs 300 crore since its launch. Another successful product in the deferred annuity segment is the ‘Systematic Retirement Plan’, launched in Q3FY22. With increasing life expectancy and rising inflation in India, the need for retirement planning is growing and this product caters to this segment.

Fund Managers who increased their holdings in HDFC Life

Fund managers who added HDFC Life to schemes under their management were Harshal Joshi and Nemish Sheth to IDFC Arbitrage Fund - Regular Plan - Growth, Kayzad Eghlim and Priyanka Khandelwal to ICICI Prudential Equity Arbitrage Fund Regular Growth, Neeraj Kumar and Arun R to SBI Arbitrage Opportunities Fund Regular Growth and Shridatta Bhandwaldar and Vishal Mishra to Canara Robeco Bluechip Equity Fund Regular Plan Growth schemes.

Biocon - Viatris acquisition expected to help gain larger footprint in developed markets

Biocon is a leading pharmaceutical player specialising in biosimilars. It recently announced that its subsidiary Biocon Biologics (BBL) entered into an agreement with Viatris to acquire its biosimilar business for $3.3 billion. This deal enhances its commercial/regulatory capabilities in developed markets. Though Biocon established its presence across the value chain of biosimilars in emerging markets, it was lacking regulatory and commercial capabilities in developed markets, and the acquisition of Viatris’ biologics business fills this gap.

The Q3FY22 results were also encouraging with the company registering highest revenues in the past eight quarters at Rs 2,222 crore. With the acquisition, the next few quarters are expected to propel Biocon as one of the world's leading biosimilar players.

Fund Managers who increased their holdings in Biocon

Increasing allotment in Biocon to respective schemes was done by Sailesh Jain to Tata Arbitrage Fund Regular Growth, Neeraj Kumar and Arun.R to SBI Arbitrage Opportunities Fund Regular Growth, Harshal Joshi and Nemish Sheth to IDFC Arbitrage Fund - Regular Plan - Growth and Priyanka Khandelwal and Dharmesh Kakkad to ICICI Prudential Pharma Healthcare and Diagnostics (P.H.D) Fund Growth respectively.

Godrej Consumer Products - Sustaining profitability despite rising input costs

Godrej Consumer Products is the FMCG company of the Godrej Group. Within the competitive FMCG sector, Q3FY22 saw leading FMCG giants deliver negative YoY growth on profitability. While Dabur’s profitability grew nominally by 2.3% YoY, and Godrej Consumer Products net profit rose 5.1% YoY in Q3FY22 to Rs 380 crore, better than most of the FMCG players.

For Godrej Consumer Products, the YoY rise in both revenue and profitability in Q3FY22 can be attributed to the hike in prices in response to the raw materials and logistic costs. Price plays an important role in the FMCG sector and price wars are frequently seen across categories by rivals. Godrej Consumer Products has stayed ahead of the pack in this quarter despite hiking prices of its products. Though volumes for categories like soap and hair colour were flat, the price hike added to margins. 

Fund Managers who increased their holdings in Godrej Consumer Products

Fund managers who added Godrej Consumer shares to schemes include Amit Premchandani for UTI Value Opportunities Fund Regular Plan Growth, Krishan Kumar Daga and Arun Agarwal for HDFC Arbitrage Fund Wholesale Plan Growth, Priyanka Khandelwal and Ihab Dalwai for ICICI Prudential FMCG Fund Growth and Mahesh Patil for Aditya Birla Sun Life Frontline Equity Fund Growth.

Laurus Labs - New high value order halts companies diminishing stock performance

Laurus Labs is one of the leading research-driven pharmaceutical manufacturing companies in India. In February 2022, the company said it received purchase orders from a leading global life sciences company, and supplies will commence from March 2022. The execution of these orders is subject to fulfilment of certain performance obligations.

In Q3FY22, the company's revenues fell 20% YoY to Rs 1,029 crore due to an impact of continued stocking concerns in the ARV business. The company said its Q3FY22 results were impacted by lower sales of ARV, APIs and formulations due to stocking at channel partners and it expects an improvement in Q4FY22. Profit after tax was down 43.7% YoY to Rs 153.70 crore in Q3FY22.

During the Q3FY22 results conference call the management said that the company is witnessing increased demand for its ARV business. It also said that sales from global agencies are expected from Q4FY22 onwards. The management believes that the sluggishness is only transitory in nature and should be normal from Q4FY22 onwards.

Fund Managers who increased their holdings in Laurus Labs

Laurus Labs saw increased buying for schemes by Hiten Shah for Kotak Equity Arbitrage Fund Growth, Sailesh Jain for Tata Arbitrage Fund Regular Growth, R.Janakiraman and Venkatesh Sanjeevi for Franklin India Equity Advantage Fund Growth and Mahendra Kumar Jajoo and Harshad Borawake forMirae Asset Hybrid Equity Fund -Regular Plan-Growth.

PB Fintech - Rerating by brokerages gives a fillip to this stock

PB Fintech, more popularly known as Policybazaar, is one among recently listed fintech players. It specialises in distribution of insurance products via its portal Policybazaar and lending via its portal Bankbazaar. It has a history of successfully acquiring a huge customer base through these portals. Its domain understanding, successes in selling a difficult product and clear roadmap for profitability is stirring interest within the investor community.

Like many other recently listed loss-making tech companies, PB Fintech stock price fell almost 50% since listing in November 2021. A few brokerages have recently upgraded their target for this stock. Indicators like the 44% YoY revenue growth in 9MFY22 and announcement of a strategic partnership with Life Insurance Corporation of India are positive factors for the future potential of this stock.

Fund Managers who increased their holdings in PB Fintech

Buying interest in PB Fintech was seen from fund managers R.Janakiraman and Sandeep Manam for Franklin India Prima Fund Growth, Taher Badshah and Dhimant Kothari for Invesco India Contra Fund Growth, Pranav Gokhale and Neelesh Dhamnaskar for Invesco India Mid Cap Fund Growth and Pranav Gokhale and Amit Ganatra for Invesco India Growth Opportunities Fund Growth schemes respectively.

Coforge - Robust order book for next few years driving high growth targets

Coforge (formerly NIIT Technologies) is one of the mid tier IT services companies that is winning contracts globally on cutting edge technologies. It has consistently posted higher revenues since the past eight quarters. In Q3FY22 the company posted its quarterly revenues of Rs 1,662.9 crore in Q3FY22 and highest quarterly profit in 10 quarters of Rs 183.7 crore.

The deal sizes are rising with the company inking a $105 million BFS (banking and financial services) deal for four years, a $20 million deal for three years in the insurance sector and a  healthy order book to drive growth. The bottoming out of the woes of the travel vertical (in the US), as well as preferred partnerships with Fortune 500 insurance and leading banking companies should play out in FY23. According to the management, recent acquisition and aggressive hiring are expected to drive 22.6% revenue CAGR over the next three years.

The company indicated that the order book is on the rise with orders in hand to the tune of around $701 million over the next 12 months. The order wins for the Q3FY22 was at US$247 mn, which consists of one contract worth $45 million, won in Europe and to be executed over next six years. The company added a total of 13 new clients during Q3FY22. 

Fund Managers who increased their holdings in Coforge

Fund managers who added to their schemes were Vinit Sambre, Resham Jain and Jay Kothari to DSP Midcap Fund Growth, Hiten Shah to Kotak Equity Arbitrage Fund Growth, Ankit Jain to Mirae Asset Midcap Fund Regular Growth and Manish Gunwani and Kinjal Desai to Nippon India Growth Fund - Growth respectively.

Avanti Feeds - Expansion holds promise but raw material inflation a concern

Avanti Feeds is a leading shrimp feed and processed shrimp player in India. It  reported revenue growth of 19.3% YoY in shrimp feed and 9.7% YoY in processed shrimp respectively in Q3FY22. Avanti Feeds plans to complete a new plant for manufacturing of shrimp feed, in Bandapuram, Andhra Pradesh by June 2022. This plant will expand capacity by 175,000 MTPA (metric tonnes per annum). This is expected to result in strong growth for the company from FY23 onwards.

Raw material cost inflation is a concern. Fishmeal prices touched Rs 102/kg during Q3FY22 and are yet to stabilise. The management highlighted large export demand as a key reason for higher prices of soybean meal, despite a good crop and the government allowing imports. While the company hiked prices  multiple times during the year, there are plans to further hike prices in Q4FY22 to counter raw material inflation.  

Shrimp is a seasonal industry. The cycle starts in mid-January and lasts till the first week of April. Harvesting starts from April to June. Second cycle starts in July.  Management expects the company to maintain its market share of 48-50% in FY22.  It has guided for EBITDA margin of 10% in FY23 and revenue growth of 15%

Fund Managers who increased their holdings in Avanti Feeds

Shares of Avanti Feeds were purchased by Anoop Bhaskar and Daylynn Pinto for IDFC Sterling Value Fund Regular Plan Growth, Rama Iyer Srinivasan, Dinesh Ahuja and Mohit Jain for SBI Magnum Children's Benefit Fund- Investment Plan Regular Growth, Neeraj Kumar and Mansi Sajeja for SBI Equity Savings Regular Growth and Sanjay Chawla Baroda Multi Cap Fund Plan A Growth scheme, respectively.

Stove Kraft - Entry into modular kitchens and investments by a Superstar investor

Stove Kraft is a kitchen solution and home solutions brand. It is one of the leading brands for home and kitchen appliances in India and among the dominant players for pressure cookers. It is also a market leader in the sale of free-standing hobs, cooktops and non-stick cookware. The company is also engaged in the manufacturing and retail of home and kitchen solutions under the Pigeon and Gilma brands and proposes to commence manufacturing of home and kitchen solutions under the BLACK + DECKER brand.

The company is looking to expand into the branded modular kitchen segment and electrical accessories. It has completed the acquisition of modular kitchen Metsmith and SKAVA Electric for entry in these segments respectively. The impact of these would be seen through FY23.

Small cap companies like Stove Kraft have attracted the attention of some superstar investors. Ashish Kacholia's name figures in the list of individual shareholders who own 1% or more stake in the company, according to the declared shareholding pattern of Stove Kraft for Q4FY22.  Data available suggests that Ashish Kacholia holds around a 1.8% stake in the company with fresh additions made during Q3FY22.

Fund Managers who increased their holdings in Stove Kraft

Shares were added by Aniruddha Naha and Vivek Sharma to PGIM India Midcap Opportunities Fund Regular Growth, Samir Rachh and Kinjal Desai to  Nippon India Small Cap Fund - Growth and Aniruddha Naha and Ravi Adukia to PGIM India Small Cap Fund Regular Growth schemes, respectively.