Strong buying from FIIs seen in these stocks; should you invest in them?
Markets have been trading higher since the beginning of October 2022. In this article, we have listed the top stocks that are witnessing strong buying from FIIs. So, read on.
Foreign Institutional Investors (FII) often increase their holding in a company only after conducting thorough due diligence because their investments are worth thousands of crores of rupees. They also have one of the finest research resources, that typically are not available to modest investors. As a result, equities on their radar are actively monitored by the market.
Having said that, in this article, we would be highlighting the top three stocks from the Nifty 500 universe that have attracted the most FII’s interest in the recent six months, as seen by their ownership pattern.
Max Healthcare Ltd
The first company on the list is Max Healthcare, which is essentially a hospital chain with a market capitalisation of Rs 40,861 crore. The astounding surge in the company's earnings in FY22, which increased by 539.8% to Rs 605.05 crore, was certainly a key driver of FII’s interest. This value was Rs 15.79 crore in FY17, representing a 5-year CAGR of 107.3%, which is quite impressive.
FIIs increased their investment in this company from 14.23% in March 2022 to 49.27% in September 2022, making it the favourite among these institutional investors in the previous six months. In other words, FIIs now hold nearly half of this hospital network.
Brightcom Group Ltd
Brightcom Group, with a market capitalisation of Rs 7,265 crore, is the next company on the list. It is a small-cap company that provides digital marketing services as well as the development of computer software and services. In FY22, sales increased 74.4% year on year to Rs 5,017.37 crore, resulting in an 88.8% increase in net income to Rs 912.21 crore, the highest ever.
The company also appears to be inexpensive, having a P/B ratio of 1.37 compared to the sector average of 6.58. On the ownership front, FIIs grew their stake from 1.87% in December 2021 to 13.55% in June 2022, representing an 11.68% rise in 6 months. The specifics for the September 2022 quarter are yet to be released.
Dr Reddy’s Laboratories Ltd
Dr Reddy's Laboratories Ltd is the third company from Nifty 500 universe with higher buying by the FII in the recent six months. This pharmaceutical company has a market capitalisation of Rs 75,001 crore and a dividend yield of 0.67%. The company's net profit has increased at an annual rate of 11.05% during the previous five years, compared to the sector's average of 3.92%. Moreover, it made a profit of Rs 2,182.5 crore in FY22, its highest since FY15.
FIIs owned a 25.16% stake in the company as of the March 2022 quarter, rising to 36.34% by the September 2022 quarter. In fact, DIIs now own 11.86% of the company, up from 9.23% a year earlier.
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