The Hindu Business Line : Tata Infrastructure Fund: The right growth mix

With the economy growing at a fast pace over the past few years, the Government has laid emphasis on infrastructure development. Spending on infrastructure may be the key to sustaining this growth momentum.

This, in turn, is likely to translate to strong order-book and consequently higher earnings visibility for companies in the infrastructure sector. Mutual fund-houses, therefore, appear to view this sector as a theme that could generate sustained returns over the next few years.

We take a look at how Tata Infrastructure Fund reshuffled its portfolio in May-July 2007. The fund has 60 stocks in its latest portfolio, of which the top three sectors account for 48 per cent. Capital goods, on an average, cornered one-fourth of the total assets in the past year. During this quarter BHEL, BEML, Elecon Engineering, Texmaco and EMCO were accumulated while Thermax and Bharat Electronics were partially sold.

With a marginal increase in its asset allocation to the power sector, the fund stepped up exposure to stocks such as NTPC, KEC International, Tata Power, Kalpataru Power Transmissions and GVK Power and Infrastructure. The fund appeared to have consciously reduced exposure to the construction sector over the past six months. However, over the past three months, the sector’s weight in the portfolio moved up marginally as holdings in Jaiprakash Associates and Gammon India increased.

Cement, which at times accounted for close to 20 per cent of the portfolio, now forms just 4.6 per cent of the total assets.

Exposure to Ambuja Cements almost doubled, while holdings in Century Textiles and Grasim were enhanced. Prominent stocks to move out were ACC and Shree Cement.

Exposure to banking stocks gradually moved up over the past six months to twice the earlier holdings. Axis Bank and Bank of Baroda were the new additions, while exposure to State Bank of India and Punjab National Bank were trimmed.

Telecom services underwent a minor rejig. Exposure to Bharti Airtel declined, while Reliance Communications was added.

Tata Infrastructure stepped up exposure to ferrous metals stocks such as Maharashtra Seamless, Jindal Stainless Steel, Tata Steel, Jindal Saw and Usha Martin. Jindal Steel and Power was added afresh.

In the engineering segment, exposure to KSB Pumps increased, while Greaves Cotton witnessed partial selling. Electrosteel Casting was the new addition.

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