SpiceJet, Honasa Consumer: FIIs raised significant stakes in these 35 companies; own any?

Foreign institutional investors (FIIs) raised their stakes in select stocks during the second quarter of the ongoing financial year when they poured nearly Rs 97,410 crore (net) into the domestic equity market. On the other hand, the benchmark BSE Sensex advanced 6.6% in Q2FY25. The BSE Midcap and BSE Smallcap gained 7% and 10%, respectively, during the same period.

Data showed that overseas investors raised their stake by over 2 percentage points in as many as 35 companies from across sectors including aviation, FMCG, technology, power, and consumer goods, among others.

With a stake of 22.87% in the September quarter, SpiceJet emerged as the top pick of FIIs in Q2FY25. They held a 1.8% stake in the airline as of June 30, 2024. Onward Technologies stood next on the list in terms of increase in shareholding. Global investors upped their stake in the company to 8.97% in Q2FY25 from 1.6% in the preceding quarter.

The low-cost airline raised Rs 3,000 crore in September via qualified institutional placement (QIP). Some of the global investors who invested in the QIP were Goldman Sachs (Singapore), Morgan Stanley Asia, BNP Paribas Financial Markets ODI, Nomura Singapore Limited ODI, Tata Mutual Fund, Discovery Global Opportunity Ltd, Societe Generale ODI, Authum Investment and Infrastructure Limited, Bandhan Infrastructure Fund, White Oak, Carnelian Bharat Amrikaal Fund, 360 ONE Equal Opportunity Fund and The Jupiter Global Fund. Nuvama Institutional Equities in September maintained a ‘Hold’ rating on SpiceJet.

Global investors also hiked their stake in GPT Infraprojects to 6.70% from 0.90% during the same period. Techno Electric & Engineering Company (to 9.80% from 4.4%), Vipul Ltd (to 7.23% from 1.9%), Honasa Consumer (to 19.31% from 14%) and Heritage Foods (to 8.27% from 3.3%) stood among other favourites of FIIs in the second quarter of FY25.

Brokerage HDFC Securities is bullish on Heritage Foods. “Over the last few years, Heritage Foods has identified a clear strategy to drive growth in its Value Added Products (VAP) (26.1% CAGR FY22-24) business to achieve its target of Rs 6,000 crore in topline within the next 3 years and to sustain EBITDA margins in the high single digits by continuing to increase VAP contribution in the overall mix (29.2% in FY24 v. 26.0% in FY22).” The brokerage has set a target price of Rs 655 in the base case scenario and Rs 707 in the bull case with a time horizon of 2-3 quarters.

Genus Power Infrastructures, Indigo Paints, Sansera Engineering, Electronics Mart India, Neogen Chemicals, Kamdhenu, Pritika Auto Industries, Adani Energy Solutions and Glenmark Life Sciences stood among other players that witnessed over 3 percentage point increase in FII holdings during the quarter.

Phillip Capital is positive on Indigo Paints with a target price of Rs 1,937. “Indigo Paints has been one of the few paint manufacturers to enter the industry in the last 20 years and maintained both their profitability and presence in the market as the fifth largest paint manufacturer. They have been category creators that have allowed them to enter the Tier 3 and 4 markets easily, giving them a first-mover advantage and pricing power. Due to the IPO in FY21 and ongoing capex, the return ratios have been subdued,” the brokerage said.

“We believe once this current capex starts reflecting in the revenues, we will see an improvement in return ratios. Further, with strong industry tailwinds and multiple growth levers we project 19.9%, 23.7% and 23.26% growth in revenue, EBITDA and PAT in the period between FY24-27E,” Phillip Capital said.

Data further highlighted that overseas investors also substantially raised their stake (by over 2 percentage point) in Tarmat, Marathon Nextgen Realty, Oracle Financial Services Software, Zen Technologies, Cyient DLM, Cholamandalam Financial Holdings, Inox Wind, Bajaj Healthcare, Tips Music, Mysore Petro Chemicals, Firstsource Solutions, RS Software (India), Lupin, LT Foods, Newgen Software Technologies, EPL and Radiant Cash Management Services in Q2FY25.