The country’s largest institutional investor Life Insurance Corporation of India (LIC) increased its stake in at least 40 firms from across the sectors ahead of March quarter earnings. Data showed that the insurance major lapped up beaten-down select Adani Group companies during the January-March quarter. LIC increased its stake in Adani Enterprises to 4.26 per cent in Q4FY23 from 4.23 in Q3FY23.
It also raised its stake in Adani Green Energy (to 1.36 per cent from 1.28 per cent), Adani Total Gas (to 6.02 per cent from 5.96 per cent) and Adani Transmission (to 3.68 per cent from 3.65 per cent). Shares of Adani Enterprises, Adani Green Energy, Adani Total Gas and Adani Transmission cracked more than 50 per cent during the January-March quarter. On the other hand, the benchmark BSE Sensex declined 3 per cent during the same period.
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Paint majors Asian Paints and Berger Paints also managed to attract LIC during the quarter gone by. The institutional investor increased its stake in Asian Paints to 3.80 per cent for the quarter-ended March 2023 from 3.14 per cent on December 31, 2022. Likewise, LIC held a 1.47 per cent stake in Berger Paints as on March 31, 2023. It was not among key shareholders in the sequential quarter-ended December 31.
According to IIFL Securities, paint dealers point towards recovery in demand post a weak Q3, driven by demand pickup in rural centres. Region-wise, the East and South saw a healthy pickup, while demand in the North and West was largely stable.
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LIC also raised its stake in banking majors including State Bank of India to 8.77 per cent from 8.75 per cent earlier. It also hiked its stake in HDFC Bank (to 4.16 per cent from 4.12 per cent) and Bank of Baroda (to 3.98 per cent from 3.75 per cent).
Shares of SBI declined nearly 15 per cent during the March quarter, while Bank of Baroda and HDFC Bank also lost 9 per cent and 1 per cent, respectively.
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Brokerage Sharekhan has a ‘Buy’ rating on HDFC Bank with a target price of Rs 1920. “We remain positive on the bank however the near-term focus will continue to be on the regulatory relaxations needed for a smooth transition.”
The insurance major also looks bullish on select beaten-down IT majors. Data highlighted that LIC increased its stake in Wipro (to 4.42 per cent from 4.22 per cent), Infosys (to 8.19 per cent from 7.71 per cent) and Tech Mahindra (to 8.07 per cent from 7.44 per cent).
Sharekhan has a ‘Hold’ rating on Infosys with a target price of Rs 1,500. “Infosys may underperform in the near term due to weak quarterly results and uncertain macro backdrop. We expect muted 3.7 per cent and 5.4 per cent Sales and PAT CAGR, respectively, over FY23-25. Hence, we downgrade the stock to hold with a revised price target of Rs. 1500.” On the other hand, Wipro is slated to announce its results on April 27.
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Brokerage IDBI Capital Markets expects flat revenue growth from Wipro in constant currency terms. An assessment done by the brokerage showed that softness in the consulting business, BFSI, tech and retail verticals are expected to result in overall muted growth. “We forecast EBIT margin to grow by 90 bps QoQ led by an uptick in utilization,” IDBI Capital Markets said. The brokerage sees 6.6 per cent QoQ and 5.4 per cent YoY growth in the net profit of Wipro in Q4. Revenue in dollar terms may grow 0.9 per cent and 3.7 per cent, respectively, during the quarter.
In the pharma space, LIC took its stake in Divi’s Laboratories to 5.55 per cent from 5.53 per cent earlier. Likewise, it held a 3.66 per cent stake in GlaxoSmithKline Pharmaceuticals against 3.54 per cent in the preceding quarter-ended December 31.
The insurer also raised its stake in select oil and gas majors during the quarter. It increased its holdings in GAIL to 7.92 per cent from 7.01 per cent earlier. LIC further lapped up a stake in oil marketing players including Indian Oil Corporation (to 8.42 per cent from 8.25 per cent) and Hindustan Petroleum Corporation (to 4.88 per cent from 3.27 per cent earlier.)
It also raised its stake in telecom major Bharti Airtel to 4.29 per cent from 4.25 per cent earlier and auto major Maruti Suzuki to 3.10 per cent from 2.82 per cent earlier.
Aditya Birla Sun Life AMC, Ashoka Buildcon, Balkrishna Industries, Coforge, Container Corporation of India, Dabur India, Deepak Nitrite, Dredging Corporation of India, HDFC AMC, ICICI Securities, IRCTC, Jaiprakash Associates, JSW Steel, Macrotech Developers, Mphasis, National Aluminium Company, Pitti Engineering, Procter & Gamble Hygiene and Health Care, The United Nilgiri Tea Estates Company, Transport Corporation of India, Voltas stood among other companies in which LIC raised its stake in Q4FY23.
