For this study, only those stocks were considered where FPIs pared stake by more than 100 basis points during the quarter. Among them is Greaves Cotton, which saw FPIs pare stake by 628 basis points to 5.01 per cent in December quarter from 11.29 per cent at the end of the September quarter. The stock has rallied 63 per cent in the past two months over December 31’s closing price of Rs 85.10 apiece.
This company reported a strong set of earnings for the December quarter that beat expectations at both revenue and operational levels. But at a share price of Rs 135 apiece, even the most bullish brokerage estimates suggest a potential downside.
Shares of Graphite India have rallied 59 per cent year to date. FPIs had trimmed their holding on the counter by 119 basis points to 5.64 per cent from 6.83 per cent sequentially. Analysts look at this stock as a play on the recovery in steel cycle, and expect more gains ahead. Brokerage Anand Rathi has a price target of Rs 590 on the stock. ICICIdirect has a ‘hold’ rating and a target of Rs 500 on the stock. The scrip traded at Rs 485 apiece on Thursday.
Century Plyboards (India) saw FPIs cut their holdings by 119 bps to 4.68 per cent from 5.87 per cent sequentially. The stock climbed 31 per cent year to date. Edelweiss said the company remains one of the strongest beneficiaries of the demand shift towards organised players given its strong brand and wide distribution reach. YES Securities said the company turned debt-free during the December quarter. Both the brokerages are positive on the stock.
Shares of Concor have rallied 46 per cent year to date to Rs 582.10 apiece. JM Financial said the resolution of land licence fee (LLF) remains the biggest overhang for the Concor stock. The brokerage has a price target of Rs 570 on the stock, which suggests downside potential from the prevailing level.
Vedanta shares have climbed 28 per cent this year. FPIs cut their holdings in the Anil Agarwal company by 144 basis points to 16.06 per cent from 17.50 per cent sequentially. Analysts said prices of commodities such as zinc, aluminium, lead, silver, copper, iron ore, steel and crude oil are trading at least 20 per cent higher than what most analysts had anticipated and estimate the company’s earnings for the next two years.
In addition, the stock still trades below the five-year average valuation multiple despite a 25 per cent rise over the past one month. These factors may support the stock in the medium term, they said.
Federal Bank has seen its shares rise 25 per cent year to date, FPIs cut their holdings by 295 basis points in the private lender to 21.69 per cent in December quarter from 24.64 per cent in September quarter. The bank reported an 8.2 per cent drop in net profit at Rs 404.10 crore for the third quarter, mainly due to higher provisioning for bad loans.
But the provisions were lesser than analyst estimates. Analysts said the bank’s collection efficiency stood at 95 per cent, and suggested that NII growth at 24 per cent YoY, retail loan growth at 16 per cent YoY and a marginal expansion in NIM were all positive takeaways from the quarterly earnings. .
UPL, Kalpataru Power Transmission, LIC Housing Finance, Century Textiles, Capri Global Capital, Bosch and Minda Corporation have all rallied 15-20 per cent this year. FPIs trimmed their stakes by 140-633 basis points in the December quarter.
