Top 10 Stocks Most Invested in by Mutual Funds in February
Mutual Funds
Mutual Funds’ Top 10 Stock Picks for February: Major Investments Revealed
February proved to be an active month for mutual funds in terms of stock investments. According to a recent report by Nuvama Alternative and Quantitative Research, mutual funds heavily favored stocks in the banking, technology, and infrastructure sectors.
The data from this report sheds light on the top 10 stocks that saw the highest investments from mutual funds during the month, including some well-established names like HDFC Bank, Kotak Mahindra Bank, Axis Bank, and ICICI Bank.
In this detailed analysis, we will dive deeper into these 10 stocks, highlighting mutual funds’ investments, sectoral preferences, and stock performance, as well as providing insights into why these stocks are attracting such attention from fund managers.
1. HDFC Bank
HDFC Bank is the undisputed leader in terms of mutual fund investments for February. According to the Nuvama report, mutual funds poured in ₹6,000 crore into HDFC Bank’s shares last month.
This staggering amount underscores the continued optimism around this banking giant. By the end of the December quarter, mutual funds held a 23.93% stake in HDFC Bank, signaling strong institutional backing. Despite this, the stock has experienced a 9% decline from its peak.
This drop could be viewed as a potential buying opportunity for investors looking to enter at a relatively lower price.
HDFC Bank’s robust financial performance, extensive customer base, and strong growth prospects make it a favorite among mutual funds.
Furthermore, its position as one of India’s largest private sector banks enhances its stability, making it an attractive investment for long-term investors.
2. Hexaware Technologies
Hexaware Technologies, a recently listed IT stock, also saw a massive investment in February, with mutual funds acquiring shares worth ₹4,200 crore.
This surge in investments highlights the growing interest in IT companies despite market volatility. As India’s technology sector continues to grow and evolve, stocks like Hexaware are attracting substantial capital.
While the stock is still in its early growth phase compared to more established players like TCS and Infosys, it shows significant potential for growth in the future.
Hexaware’s innovative approach to IT solutions, along with its strong market positioning, continues to make it a favorite among mutual fund managers seeking exposure to the high-growth tech sector.
3. Tata Consultancy Services (TCS)
Tata Consultancy Services (TCS), one of the world’s largest IT services companies, remained a top pick for mutual funds in February.
Mutual funds bought shares worth ₹3,900 crore of TCS, reflecting the continued confidence in this blue-chip company.
However, mutual funds held only a 4.3% stake in TCS by the end of the December quarter, despite the company’s established leadership position in the IT sector.
TCS has been a consistent performer, and despite its stock being down 24% from its peak, it remains a favorite for many investors.
Its global presence, diverse client base, and strong revenue growth make it a safe and reliable investment for mutual funds.
4. Ultratech Cement
Ultratech Cement, India’s largest cement company, is another major beneficiary of mutual fund investments.
Mutual funds bought ₹2,400 crore worth of Ultratech shares in February. This is especially significant given Ultratech’s recent diversification into the wire and cable business, which has helped it expand its market footprint.
At the end of the December quarter, mutual funds held a 12.26% stake in the company. Despite a 13% dip from its peak,
Ultratech’s long-term prospects remain strong, driven by India’s booming infrastructure sector and increasing demand for cement. Its stable earnings and market leadership continue to make it a reliable choice for institutional investors.
5. Kotak Mahindra Bank
Kotak Mahindra Bank also caught the eye of mutual funds in February, with ₹2,300 crore worth of shares being bought.
Kotak is one of India’s largest private-sector banks, and it has consistently attracted mutual fund interest.
The stock is currently trading near its 52-week high, indicating investor confidence in the bank’s continued growth trajectory.
By the end of the December quarter, mutual funds held a 17.44% stake in Kotak Mahindra Bank, highlighting its stability and growth potential.
The bank’s strong fundamentals, conservative risk management, and expanding digital presence make it a top pick for mutual funds looking for a mix of growth and stability.
6. Axis Bank
Axis Bank, one of the largest private-sector banks in India, was also a favorite of mutual funds in February.
According to the Nuvama report, mutual funds bought shares worth ₹1,900 crore of Axis Bank. By the end of the December quarter, mutual funds held a 29% stake in Axis Bank, showing strong institutional backing for the stock.
Axis Bank has been performing well in terms of both revenue growth and asset quality. Its efforts to enhance digital banking services, along with its diversified loan portfolio, have made it an attractive option for investors.
The bank’s resilience in the face of market volatility is evident from its growing market share and strong financials.
7. Power Grid Corporation of India
Power Grid Corporation, a major player in India’s power transmission sector, also witnessed heavy investments from mutual funds, with ₹1,800 crore worth of shares purchased in February.
The stock, which is currently down nearly 25% from its peak, represents a value investment opportunity for fund managers.
Despite the drop in stock price, Power Grid continues to benefit from India’s increasing demand for electricity and infrastructure expansion.
Mutual funds held a 12.1% stake in Power Grid by the end of February, and the company’s stable earnings from long-term power transmission contracts continue to make it a safe bet for conservative investors looking for predictable returns.
8. Larsen & Toubro (L&T)
Larsen & Toubro (L&T), a giant in India’s infrastructure sector, was another key stock for mutual fund investment.
Funds bought shares worth ₹1,700 crore of L&T in February, making it one of the top picks for the month.
The stock is down 20% from its peak, but its market position in construction, engineering, and technology makes it an attractive long-term investment.
L&T’s diversified business operations, spanning from infrastructure and construction to IT services, continue to offer growth potential.
Its significant role in government infrastructure projects and large-scale private-sector ventures further bolsters its appeal.
9. ICICI Bank
ICICI Bank, one of India’s leading private-sector banks, saw mutual funds purchasing shares worth ₹1,700 crore in February.
The stock is nearing its previous high again, and mutual funds currently hold a 29.5% stake in the bank. ICICI has been steadily increasing its market share in both retail and corporate banking, driven by its digital banking initiatives and robust asset quality.
ICICI Bank’s strong fundamentals, coupled with a growing loan book and improving asset quality, make it a solid investment choice for mutual funds looking for consistent performance.
10. Varun Beverages
Varun Beverages, the bottling partner for PepsiCo in India, also saw significant investment in February, with mutual funds buying shares worth ₹1,600 crore.
The stock is currently trading around 30% below its recent peak, presenting a potential opportunity for mutual funds looking to capitalize on its recovery.
Varun Beverages has a strong market presence and has continued to expand its product portfolio. Despite short-term volatility, the company’s position in the fast-moving consumer goods (FMCG) sector makes it a favorable option for investors seeking long-term growth.
Final Remarks
February was a month of significant investment activity for mutual funds, with strong focus on the banking, technology, and infrastructure sectors.
HDFC Bank, Kotak Mahindra Bank, Axis Bank, and ICICI Bank dominated the list of top picks, but companies from the technology and infrastructure sectors, such as TCS, Hexaware, Ultratech Cement, and Larsen & Toubro, also saw substantial investments.
For investors, these top 10 stocks offer valuable insight into where mutual funds are placing their bets.
Whether looking for stable returns or seeking growth opportunities in emerging sectors, the stocks highlighted in this report represent a mix of well-established players and high-potential growth companies that are set to drive the future of India’s economy.
