Mutual funds seem to have strong conviction in at least five BSE 500 stocks, as they have been buying these for at least 10 quarters in a row now.
Quarterly shareholding data showed one of the stocks,
, saw 15 straight quarters of mutual fund buying. Others are Firstsource Solutions, Lux Industries, and V-Mart. These stocks have also delivered strong gains so far.
Gujarat Gas has rallied 86 per cent year-to-date and has gained 360 per cent in the past three years. While mutual funds still hold less than 10 per cent stake in this PSU stock, their holding in the company has consistently risen from 1.08 per cent in the September quarter of 2017 to 7.68 per cent in June quarter of 2021.
Radico Khaitan and V-Mart Retail have seen 12 quarters or three years of consistent MF buying. In the case of Radico, MF holding has jumped to 16.86 per cent in the June quarter of 2021 from 4.42 per cent in the June quarter of 2018. Similarly, MFs held 2.32 per cent stake in V-Mart in the June quarter of 2018, which has jumped to 20.85 per cent in the June quarter of 2021.
First Source Solutions and Lux Industries are two stocks where MF holding has risen for 11 quarters each. Mutual funds owned 12.61 per cent stake in First Source Solutions as of June 30 against 3.53 per cent in the September quarter of 2018. For Lux Industries, MF holding has jumped to 6.44 per cent from 1.41 per cent during the period.
First Source Solutions is up 93 per cent year-to-date and rallied 157 per cent in the last three years. Lux Industries has rallied 147 per cent year-to-date, even as its three-year return stands at 140 per cent, suggesting the stock had a long period of consolidation before seeing a rally this year.
Four out of these five stocks offer up to 14 per cent potential upside, median estimates of analysts tracking these stocks suggest.
Gujarat Gas has 20 buy calls, five hold and five sell calls. This stock has a median 12-month target of Rs 733 by 31 analysts. The stock on Friday traded at Rs 705.40 apiece, suggesting a 4 per cent potential upside.
V-Mart has 15 buy calls, three hold and one sell call. The stock has a median 12-month price target of Rs 3,900 by 19 analysts. It traded at Rs 3,635.15 on Friday, suggesting up to 7 per cent potential upside.
Radico has six buy calls and one call each of hold and sell. Ten analysts have given this stock a median price target of Rs 1,000. At Friday’s price of Rs 908.10, the target suggested up to 10 per cent upside.
FirstSource has six buy and three hold ratings with a median target of Rs 220, suggesting up to 14 per cent upside over Friday’s intraday price of Rs 193.
Lux Industries is not a widely tracked one. The stock has one buy and one hold rating with a target of Rs 3,707.50, and is trading above that target at Rs 4,106.40.