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1. JSW Steel: ICICI Securities continues to be bullish on this steel company post strong Q1FY21 results, with an 18.5% upside and a target price of Rs. 850. JSW reported ITS highest ever quarterly revenue, operating EBITDA and net profit after tax. "The 5 MTPA Dolvi expansion will commence operations by September 2021, providing healthy revenue visibility," Analyst Dewang Sanghavi writes. Key risks, they note, include "a steep decline in steel prices, and higher than expected rise in operating costs."

2. Hindustan Unilever: This FMCG giant is a pick for Axis Securities with an upside of 13%+ on a target price of Rs. 2,670. "The topline was in line with our expectations though on all other key bottom-line numbers, the performance was below our expectations," analysts Gaurav Uttrani and Suvarna Joshi write. But they note, "Q1FY22 performance displayed resilience with improving trajectory across the portfolio, especially in the discretionary products. The management indicated that rural growth will continue."

3. HCL Technologies: This software company is among the players riding the IT demand recovery globally, and Geojit is a buy on this stock, giving it an upside of 15.4% on a target of Rs. 1147. "Despite the second wave of the pandemic, the company has shown high resilience," analyst Sheen G writes, "With continued investments in digital engineering and geography expansion, HCL is positive about scaling up its margins in upcoming years apart from winning large deals, with healthy renewal rates." 

4. Can Fin Homes: Edelweiss is a buy on this finance company, with a target price of 660 and an upside of 24%."Credit costs continued to moderate with provisions declining 85% YoY and 15% QoQ, resulting in PAT growth of 16% YoY and 6% QoQ," analyst Vinay Khattar notes. "Management expects growth to return from Q2FY22 while NIMs/spreads should increase with loans getting repriced at higher yields." The key risks here include another round of lockdowns driven by an third wave of infections and the company's current significant AUM concentration in Bangalore (~37% of AUM).

5. Indian Bank: Chola Wealth Direct is a buy on this bank, noting the improvement in NIM and lower opex boosted operating performance while tax reversal propped up PAT, says analyst Arjun Pasumarthi. "The bank’s improving collection efficiencies and less than expected restructuring have improved credit cost outlook. In addition, the anticipated recovery in corporate demand should support the credit off take in 2HFY22E," he writes. Risks include fresh slippages in stressed sectors, and delayed recoveries in loans. 

The steel production momentum of FY21 failed to carry over in the first quarter of FY22. In Q4FY21, top domestic producers - Tata Steel, JSW Steel, and Jindal Steel and Power's steel production rose above pre-Covid levels. This was in response to the rising demand for steel from infrastructure and realty companies, and the soaring price of finished steel and steel products. However, in Q1FY22 operations were disrupted due to state-wide lockdowns. This lowered steel production volumes sequentially.

By Parth Mansinghka

Many investors look at superstar investors’ portfolios for cues as to which stocks might do well. Of course, this comes with its own risks, as some investors with their sizeable portfolios and long investment horizons have the wherewithal to withstand a market downturn, while some others may not. We took a look at the portfolios of some superstar investors to understand which companies or sectors they are cashing out of or trimming their stakes. This is especially relevant considering the elevated levels of the Indian benchmark indices. 

Mohnish Pabrai’s portfolio saw a lot of selling 

Pabrai’s portfolio was one of the Superstar investors whose portfolio saw a lot of selling in Q1FY22. There were four companies that saw stake cuts in Q1FY22. Pabrai sold a 4.7% stake in Kolte-Patil Developers, 4.37% stake in Rain Industries, 2.31% stake in Sunteck Realty, and 1.11% stake in Edelweiss Financial Services. He has reduced his stake in Kolte-Patil Developers, Sunteck Realty, and Edelweiss Financial Services for the second consecutive quarter now. In the first six months of 2021, Kolte-Patil Developers’ stock fell 10%, Sunteck Realty fell 17.2% and Edelweiss Financial Services rose 4.5%. However, the stock of Rain Industries rose 35% in the same period, and it looks like he booked some decent profits in this stock.

Porinju V Veliyath cuts stake in many companies

Porinju V Veliyath had been cutting his stake in Archies for the last three quarters and at the end of June 2021, his stake in the company dropped to below 1% from 3.6%. With the Covid-19 pandemic, Porinju might have sold the gift and home decor company because these products are not amongst people’s priorities right now. The company reported a loss of Rs 1.1 crore in Q4FY21 against a profit of Rs 2.6 crore in the year-ago period.

Veliyath sold a 1.1% stake in Som Distilleries & Breweries, a 0.19% stake in Emkay Global Financial Services, and a 0.09% stake in Kaya in Q1FY22. In the first six months of 2021, the stocks of Som Distilleries & Breweries, Emkay Global Financial Services, and Kaya rose 45%, 17%, and 21.6% respectively, and Veliyath seems to have booked decent profits here. In the past two quarters, Veliyath also reduced his stake in Orient Bell to 3.83% from 4.25%. Over the past six months, Orient Bell rose around  62% and also touched a  52-week high of Rs 359 per share.

Rakesh Jhunjhunwala trims stake in Titan

Ace investor Rakesh Jhunjhunwala sold a 0.25% stake in his favourite company and largest portfolio holding, Titan in Q1FY22. He had been reducing his stake in the company over the last three quarters now. Jhujhunwala’s stake in Titan is now trimmed down to 4.8% from 5.5% at the end of Q2FY21. The fall in the Big Bull’s stake in Titan coincided with the shutdown of retail stores due to the first and second wave of the pandemic. This is likely to impact the company’s Q1FY22 revenues and earnings. He sold a 0.15% stake in Tata Motors and a 0.56% stake in TV18 Broadcast in Q1FY22. The stock of Tata Motors and TV18 Broadcast rose around 82% and 38% in the first half of 2021, so Jhunjhunwala booked some decent profits here.

Ashish Kacholia books some profits

Ashish Kacholia sold a 0.63% stake in Birlasoft, a 0.26% stake in NIIT, a 0.1% stake in Poly Medicure, and a 0.09% stake in Vaibhav Global in Q1FY22. He now holds a 1.4% stake in Vaibhav Global, a 2.26% stake in NIIT, a 1.67% stake in Poly Medicure, and a 1.2% stake in Birlasoft. All of these companies gave good returns over the last two quarters and posted a new 52-week high during the period. Hence, here also there might be some profit booking done by the Superstar.

Vijay Kedia trims stake in Neuland Labs and Cheviot

Vijay Kishanlal Kedia sold a 0.55% stake in Neuland Laboratories and a 0.25% stake in Cheviot. He now holds a 1% stake in Neuland Laboratories and a 1.3% stake in Cheviot. During the first six months of 2021, Cheviot and Neuland Laboratories rose 176% and 98% respectively. This rise could be the reason for booking profits by Kedia in these two stocks as both touched new 52-week highs in Q1FY22. 

Ashish Dhawan trims stake in Birlasoft and Max Healthcare

Ashish Dhawan sold a 0.73% stake in Birlasoft and a 0.25% stake in Max Healthcare in Q1FY22. He now holds a 2.9% stake in Birlasoft and a 1.4% stake in Max Healthcare. Both Birlasoft and Max Healthcare stocks rose by 60% and 79% from January-June 2021 and touched their 52-week highs. It appears that Dhawan booked some profits in these stocks.

It appears that some of the sale transactions by the Superstar investors were triggered by stocks touching their 52-week highs. With markets at their peaks, it is the ideal time to book some profits. It will be interesting to see whether some of these companies continue to find favour over the next three months in some superstar portfolios.