Mutual funds' top 10 stocks outdo Sensex, show further upside potential

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NEW DELHI: Shares of companies with highest mutual fund holdings have largely beaten benchmark Sensex in terms of returns in 2021 so far. Among the top 10, median price targets for eight suggest potential for a further 10-39 per cent upside in these stocks.

Among them, one stock has doubled investor money, three have delivered over 50 per cent returns and three others have managed to beat Sensex’s 24 per cent return so far this year.

As per AceEquity data, KNR Construction is the most MF-heavy stock, with domestic funds owning 32.6 per cent in the construction & engineering company. This scrip has climbed 77 per cent year to date.

PNC Infratech, where MFs owned 26.52 per cent stake as of June 30, has delivered 101 per cent return year to date. Equitas Holdings, where MF ownership stood at 29.78 per cent as of June 30, is up 80 per cent.

Out of 19 analysts tracking KNR Construction, 16 have either ‘buy’ or ‘strong buy’ recommendations on the stock.

“KNR’s execution is likely to remain healthy over the next few years, thanks to strong order book position, expected receipt of appointed dates in most of the projects by FYY22-end, normalisation of labour strength and smoothening of raw material supply chain,” ICICIdirect said.

That said, the median price target of Rs 304.70 for the stock suggests an upside potential only in single-digit percentage.

PNC Infratech has 19 ‘buy’ and just one ‘hold’ calls, but the stock has breached the median target price of Rs 351. That said, all MF-heavy stocks have median targets that suggest double-digit returns.

In the case of Equitas Holdings, a median target of Rs 145.20 suggests an 18 per cent upside potential.

Analysts are largely positive on Greenply Industries with the lowest price target, suggesting 10 per cent upside and the highest target suggests a 39 per cent likely surge. Similar is the case with Ahluwalia Contracts, where 13 analysts see a minimum of 10 per cent and maximum of 37 per cent potential upside.

Greenply Industries (MF stake at 30.78 per cent) and Ahluwalia Contracts (MF stake at 26.57 per cent) have climbed this year by 57 per cent and 37 per cent, respectively.

Techno Electric (MF holding at 29.62 per cent) and Crompton Greaves Consumer Electricals (31.48 per cent) gained 25-26 per cent year to date. A median target of Rs 375.40 suggests 38.55 per cent upside for Techno Electric. For Crompton Greaves Consumer, a median target of Rs 516.60 suggests a potential upside of 10 per cent.

The Federal Bank (up 21 per cent), City Union Bank (down 16 per cent) and DCB Bank (down 22 per cent) are some of the other MF-heavy stocks (MF stakes at 27.01-32.59 per cent), which have underperformed Sensex this year. But all of them have strong upside potential.

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