The market seems to be overbought now and profit-booking has started to take place. Generally, these times are a good opportunity to latch on to your favorite blue chip companies. But not all blue chips might rally in the near future due to institutional selling.
In that vein, here are 2 large-cap stocks that have witnessed the highest MF selling in the last six months.
Dr Reddy’s Laboratories Limited
Dr. Reddy’s Laboratories Ltd (NS:REDY) is a well-known pharmaceutical company with a market capitalization, of INR 81,597 crores. The company’s shares have delivered a return of 11% in the last 3 months, partly owing to the positive sentiments in the pharma space. It also posted a record-high revenue of INR 25,762.2 crores in FY23 but it seems like mutual funds are not satisfied with the company’s outlook.
MFs have trimmed down their stake for 3 consecutive quarters to 9.87% in March 2023, from 14.12% a year ago. The stock price has remained at around the same level since September 2020 which could be another reason for these funds moving out.
Tube Investments of India Limited
Tube Investments of India Ltd (NS:TBEI) is a mobility-focused manufacturing company with a market capitalization of INR 61,293 crores. The company’s revenue jumped to the highest-ever INR 15,282.68 crores in FY23 and profit margins also improved slightly to 6.25% but there’s no doubt that the stock has become expensive.
Just like the entry, the exits are also important as rarely one would get a hold-on-forever stock. Due to a run-up of over 112% in the last 12 months, the P/E ratio jumped to 64.14 while the P/B ratio also surged to 16.45. MFs are booking their profits, cutting down their stake from 12.66% in September 2022 to 10.34% in March 2023.
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