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    Rs 20,000 crore selloff! LIC pressed sell button on Maruti, 9 other stocks in Q2

    Synopsis

    Amid easing of semiconductor chip shortage issues and strong demand outlook, Maruti shares have rallied over 26% in the last 6 months. India's biggest carmaker had managed to surprise the Street with a four-fold rise in net profit in the September quarter to Rs 2,062 crore while its revenue rose 46% to Rs 29,930.80 crore.

    Rs 20,000 crore selloff! LIC pressed sell button on Maruti, 9 other stocks in Q2AFP
    NEW DELHI: Life Insurance Corporation (LIC), which is the largest domestic institutional investor in the Indian equity market, reduced its holding in 105 stocks in the September quarter. With India's largest automobile manufacturer Maruti Suzuki India on top of the list, the sell-off by LIC in 10 stocks alone is estimated to be worth nearly Rs 20,000 crore.

    LIC sold 43.2 lakh shares of Maruti Suzuki during the quarter to reduce its stake in the auto major to 3.43% from 4.86% in Q1. The net sale is estimated to be worth Rs 3,814 crore, as calculated by multiplying the difference in June and September shareholding by the average closing price during the quarter, according to a report by PRIME Database Group.

    Amid easing of semiconductor chip shortage issues and strong demand outlook, Maruti shares have rallied over 26% in the last 6 months. India's biggest carmaker had managed to surprise the Street with a four-fold rise in net profit in the September quarter to Rs 2,062 crore while its revenue rose 46% to Rs 29,930.80 crore.


    In value terms, the second largest selling was seen in shares of PSU stock PowerGrid, which have lost over 8% of its value in the last 6 months. The state-run power transmission major missed earnings estimates by reporting a 9% year-on-year (YoY) rise in profit after tax (PAT) at Rs 3,651 crore in Q2.

    The PSU insurer also booked partial profit in NTPC by reducing stake from 9.97% to 8.61%. Up around 35% year-to-date, NTPC is among the best performing Nifty stocks and also comes with an attractive dividend yield of over 4%. The state-run power transmission major missed earnings estimates by reporting a 9% year-on-year (YoY) rise in profit after tax (PAT) at Rs 3,651 crore in Q2.

    The list of highest selling by LIC in the September quarter also includes the likes of Sun Pharma, HAL, UltraTech Cement, Siemens, Britannia Industries and Bajaj Auto.

    What should investors do?

    As domestic sectors held up well in the just-ended quarterly earnings season, auto and banking related sectors are on top of the list of most analysts.

    Financials recorded strong growth on the back of margin expansion, led by better-than-expected NIM (net interest margin) improvement. Auto companies saw improved realisation, recovering volume along with better gross margin. On the other hand, commodity sectors have disappointed.

    Amid sectoral rotation, banks were the top gainer in October, followed by auto stocks, while FMCG and pharma remained at the bottom.

    "Sectors sensitive to faster economic growth and business activity will likely underperform in the short run. Companies with substantial market share & high pricing power still perform better across these sectors. Even industries that are dependent upon domestic demand can perform well. Companies that can pass the input cost pressure to the end consumer are in a better place," said a report by Fisdom Research.

    Global brokerage Morgan Stanely has an overweight stance on financials and underweight on healthcare on relative valuations.

    "We downgrade the India healthcare sector to underweight due to unattractive valuations and deep downward earnings revisions. However, we have upgraded India industrials and India utilities to equal-weight and continue to recommend investors hold overweight positions on India financials in regional portfolios," the brokerage said in a recent report.

    (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times.)



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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