In May, benchmark indices Nifty 50 and Nifty 500 surged by 2.6% and 3.6% respectively. This rally was fueled by India’s promising growth prospects and softening inflation, as the International Monetary Fund projected a GDP growth of 5.9% in FY24. 

Foreign institutional investors also turned into net buyers in the Indian markets, making an investment of Rs 27,856 crore in May. The upbeat market brought back interest in midcap growth stocks. The Nifty Midcap 100, which shot up by 6.2% in May, saw the highest interest from fund managers.

FSN E-Commerce - Focus on cost optimization and private label growth to drive margins 

FSN E-Commerce Ventures Ltd (NYKAA): FSN E-Commerce Ventures, commonly known as Nykaa, is an e-commerce platform involved in the online sale and distribution of personal care, health care and fitness products.  

While Nykaa has demonstrated efficiency in its beauty and personal care segment, its expansion into the highly competitive fashion industry remains a concern. Improvement in private label sales and better product mix is expected to drive the top line and improve margins. Nykaa’s management is also committed to cost optimization measures, including reducing advertising and marketing expenses, to positively impact the bottom line. The company announced losses in Q4FY23, and lower profits in FY23 compared to the previous year.

Fund managers who bought shares of Nykaa

Fund managers who added shares of Nykaa to their portfolios include Neelesh Surana and Ankit Jain for Mirae Asset Emerging Bluechip Fund, Rajat Chandak and Sharmila D’mello for ICICI Pru Flexicap Fund, Chanchal Khandelwal and Dhaval Joshi for Aditya BSL India GenNext Fund, Saurabh Pant and Mohit Jain for SBI Large & Midcap Fund, and Gaurav Khandelwal and Gaurav Misra for Mirae Asset Large Cap Fund.

Exide Industries - Fresh investments in lithium-ion battery manufacturing

Exide Industries (EXIDEIND): The Kolkata-headquartered firm is a manufacturer of lead-acid and lithium-ion storage batteries and inverters. Its batteries find applications in automobiles, industries, home appliances and submarines. The firm generates 74% of its revenue from the automotive space.

Exide has been a market leader in the storage batteries space. However, increased competition and higher market penetration have pushed the company to explore emerging technologies like lithium-ion. With a planned outlay of Rs 6,000 crore, Exide aims to establish a 12 GWh plant for lithium-ion battery production, which is expected to be operational within the next 2-3 years. The firm has a battery pack assembly unit for lithium-ion batteries, which has received orders worth Rs 600 -700 crore, scheduled to be executed in the next 12-15 months. 

Fund managers who bought shares of Exide Industries

Fund managers who added shares of Exide Industries to their portfolios include Pankaj Tibrewal and Arjun Khanna for Kotak Emerging Equity Fund, Harsha Upadhyaya and Arjun Khanna Kotak Equity Opportunities Fund, and Manish Gunwani for Bandhan Core Equity Fund. Fresh buys were done by Sailesh Raj Bhan and Ashutosh Bhargava for Nippon India Multi Cap Fund and Sonam Udasi and Amey Sathe for Tata Equity P/E Fund.

Kalpataru Projects International - Diversification into other EPC businesses key for order book growth

Kalpataru Projects International (KPIL):  Kalpataru Projects, commonly known as Kalpataru Power Transmissions, is a global EPC (engineering, procurement, and construction) player with a diversified play in power transmission and distribution, oil and gas pipelines, railways and biomass-based power generation.

To mitigate risks associated with the transmission and distribution business, Kalpataru is actively expanding into new geographies and segments. The company has ventured into water, railways, civil, and industrial construction businesses. Also, the merger with JMC and its specialized civil business in FY23 has enabled it to undertake large orders. The firm currently has an order book of Rs 14,400 crore, with nearly 90% originating from the international segment. As a result, Kalpataru has become the second-largest listed EPC player in terms of the order book. 

Fund managers who bought shares of Kalpataru Projects International

Fund managers who added shares of Kalpataru Projects to their portfolios include Sankaran Naren and Manish Banthia for ICICI Pru Equity & Debt Fund, Harish Bihani and Sharmila D’mello for ICICI Pru Smallcap Fund, and Kunal Sangoi and Dhaval Joshi for Aditya BSL Pure Value Fund. Fresh buys were done by Atul Penkar and Dhaval Joshi for Aditya BSL Equity Advantage Fund, and Mahesh Patil and Chanchal Khandelwal for Aditya BSL Equity Hybrid '95 Fund.

Engineers India - Execution quality remains key for huge order book

Engineers India (ENGINERSIN): This public sector undertaking with interests in consultancy and engineering of turnkey projects is focused on oil, gas and petrochemical industries in India and abroad.

Engineers India is trying to diversify into new growth verticals like coal gasification, defence and transportation. Its network in the oil & gas industry has helped drive new projects. The firm has an order book of Rs 7,690 crore and another Rs 1,590 crore is in the pipeline. It has guided an EBIT of 27% for consultancy projects and 4% for turnkey projects. The firm is expanding its footprint in the Middle East to take maximum advantage of the oil & gas project hub.

Fund managers who bought shares of Engineers India

Fund managers who added shares of Engineers India to their portfolios include Rohit Singhania and Jay Kothari for DSP India T.I.G.E.R Fund, and Vinit Sambre and Jay Kothari for DSP Small Cap Fund. Fresh buys were done by Atul Bhole and Dhaval Gada for DSP Flexi Cap Fund Fund, Vikram Chopra and Atul Bhole for DSP Equity & Bond Fund and Laukik Bagwe and Atul Bhole for DSP Dynamic Asset Allocation Fund.

CIE Automotive India - Seeks synergies by realigning itself with the parent firm 

CIE Automotive India (MAHINDCIE): This subsidiary of CIE Automotive Spain is a tier-2 component supplier to the automotive industry. CIE Automotive’s expertise lies in forgings, castings, gears, composites, and magnetic components.

Mahindra and Mahindra exited CIE Automotive by selling their entire stake of 3.2% in May 2023. This has aligned CIE India’s goal with its European parent. This is expected to generate enhanced synergies between the two entities. New orders from Bosch, Royal Enfield and Stellantis have solidified CIE’s position in the Indian automotive industry. The firm is betting on the EV wave by adding more products to its portfolio. The firm expects 50% of its new business to come from the EV segment in 2-3 years.  

Fund managers who bought shares of CIE Automotive India

Fund managers who added shares of CIE Automotive to their portfolios include Shreyash Devalkar and Vinayak Jayanath for Axis Flexi Cap Fund, and Ashish Naik and  Vinayak Jayanath for Axis Business Cycles Fund. Fresh buys were done by Shridatta Bhandwaldar and Ajay Khandelwal for Canara Robeco Small Cap Fund, and Gopal Agrawal and Priya Ranjan for HDFC Large and Mid Cap Fund and  HDFC Multi Cap Fund.

Vedant Fashions - Newer brands in women's clothing hold potential

Vedant Fashions (MANYAVAR): Manyavar specializes in the Indian wedding and celebration wear segment. The firm operates a network of 640 franchise-owned exclusive brand outlets. 

By implementing data-driven demand forecasting and tech-enabled supply chain management, the company effectively optimized costs. Manyavar is nurturing its emerging brands like Mohey, Twamev and Manthan to cater to different segments with varying price points across geographies. The Mohey brand caters to women's traditional wear and contributes 10% of the total revenues. It is a potential game-changer for Manyavar. The women’s celebratory clothing market pegged at Rs 74,000 crore, is roughly 5x bigger than the men’s segment.

Fund managers who bought shares of Manyavar

Fund managers who added shares of Manyavar to their portfolios include R Srinivasan and Dinesh Ahuja for SBI Equity Hybrid Fund, Pankaj Tibrewal and Arjun Khanna for Kotak Emerging Equity Fund, Vinay Paharia and Puneet Pal for PGIM India Midcap Opps Fund, and Rajat Chandak and Sharmila D’mello for ICICI Pru Flexicap Fund. Fresh buys were done by Anil Shah and Dhaval Joshi for Aditya BSL Flexi Fund.
 

Balkrishna Industries - Softening input costs to expand margins

Balkrishna Industries (BALKRISIND): This prominent manufacturer in the off-highway tire market specializes in agricultural, industrial and off-road tires. The company is an OEM vendor for John Deere, JCB and CNH Industrial. It has a major presence in the US and Europe, apart from India.

The recent headwinds, including an increase in raw materials and freight costs, have compressed margins. However, as supply chain issues ease-out, Balkrishna Industries is in the process of destocking. With the added import duties on Chinese tires, the firm has gained a competitive advantage. It plans to increase its market share in global off-road tires from the current 6% to 10% in the next 4-5 years. To enhance its competitiveness, Balkrishna Industries is maintaining a lower price gap of around 12-15% compared to its European counterpart.

Fund managers who bought shares of Balkrishna Industrie

Fund managers who added shares of Balkrishna Industries to their portfolios include Siddharth Bothra and Niket Shah for Motilal Oswal Flexicap Fund, Niket Shah and Ankush Sood for Motilal Oswal Midcap 30 Fund, Vinay Paharia and Puneet Pal for PGIM India Midcap Opps Fund, Taher Badshah and Dhimant Kothari for Invesco India Contra Fund, and S Bharath and Ratish Varier for Sundaram Mid Cap Fund.

Coforge - Sustaining growth in a challenging environment

Coforge (COFORGE): Formerly known as NIIT Technologies, Coforge is a global digital services and solutions provider. With a presence in 21 countriesm and 25 delivery centres, the firm derives nearly 48% of its revenue from America. The firm’s BFSI vertical has a revenue share of 53%. 

While many Indian software giants are facing a slowdown in BFSI spending, Coforge has been strengthening ties and winning new deals. It currently has an order book of $869 million, with contributions of $300 million each from the BFSI and travel verticals. The firm has increased its utilization levels and lowered its attrition rate. It is also seeing margin expansion.    

Fund managers who bought shares of Coforge

Fund managers who added shares of Coforge to their portfolios include Niket Shah and Ankush Sood for Motilal Oswal Midcap 30 Fund, and Meenakshi Dawar and Dhrumil Shah for Nippon India Value Fund. Fresh buys were done by Siddharth Bothra and Niket Shah for Motilal Oswal Flexicap Fund, Neelesh Surana and Ankit Jain for Mirae Asset Emerging Bluechip Fund, and S Bharath and Ratish Varier for Sundaram Mid Cap Fund.

Mankind Pharma - India-specific business eliminates competition

Mankind Pharma (MANKIND): Mankind is a leading player in the Indian pharmaceutical market, with 91% of its revenue derived from branded formulations. The firm has a presence in the anti-infectives, cardiac, gastro, and respiratory segments. It is also into consumer healthcare, offering products like condoms, emergency contraceptives and pregnancy tests. 

Mankind Pharma launched its IPO in April 2023 and was subscribed 15.3 times its issue size. As the fourth-largest pharmaceutical firm in India, Mankind Pharma's focus on the domestic market provides a barrier against intense competition in highly regulated international markets. It also shields the company from challenges like policy changes, currency risks and economic slowdowns. The firm has outperformed the Indian pharmaceutical industry over the past three years and is expected to scale its operations further.  

Fund managers who bought shares of Mankind Pharma 

Fund managers who added shares of Mankind Pharma to their portfolios include Tanmaya Desai and Mohit Jain for SBI Healthcare Opportunities Fund, Siddharth Bothra and, Niket Shah for Motilal Oswal Flexicap Fund, and Chirag Setalvad and Priya Ranjan for HDFC Mid-Cap Opportunities Fund. Fresh buys were done by Sailesh Raj Bhan and Kinjal Desai for Nippon India Pharma Fund, and Aditya Khemani and Rakesh Shetty for Motilal Oswal L/T Equity Fund.

Safari Industries - Premium range to aid top line and margins

Safari Industries (Safari): Safari manufactures and markets luggage and luggage accessories.  The company operates production facilities in Mumbai and Halol, Gujarat, where it manufactures injection-molded and vacuum-formed plastic articles. However, the majority of its fabric products are imported.

The recent increase in tourism activities following the easing of COVID-19 restrictions has provided Safari Industries with an opportunity to capture a larger market share. The firm is undertaking price hikes and lowering discounts, increasing-price realizations. Also, the increase in retail footprint and its venture into the premium segment has led to the firm outperforming its industry. The company also plans to expand its capacity by 25% in FY24, in line with its demand outlook.

Fund managers who bought shares of Safari Industries

Fund managers who added shares of Safari Industries to their portfolios include Chirag Setalvad and Priya Ranjan for HDFC Small Cap Fund, Amit Nigam and Dhimant Kothari for Invesco India Tax Plan Fund, Manish Lodha and Abhinav Khandelwal for Mahindra Manulife Small Cap Fund, Sachin Relekar and Harshal Joshi for Bandhan Midcap Fund, and Amit Nigam and Pranav Gokhale for Invesco India Multicap Fund