Sundaram BNP Paribas CAPEX Opportunities, among the top performers over the past year, focusses not so much on companies that are in a capital spending phase but on those suppliers of products and services that benefit most from the investment wave. It is a highly concentrated fund, with about 70 per cent of the portfolio invested in the capital goods sector. The portfolio has about 50 stocks but large bets are made in a select few, which is a departure from the fund house’s usual practice of limiting stock-specific exposure.
CAPEX Opportunities chooses stocks with a 24-month outlook. However, there has been a significant churn in its portfolio between end-March and end-June. During the period, the fund exited as many as 18 stocks and took exposures in 12. It increased its focus on capital goods and related stocks, taking its overall exposure to the sector to 69 per cent from 55 per cent earlier. Metals and energy also saw a big increase in exposure, while construction, automobiles and cement sectors took a cut.
The fund sold Era Construction, Hindustan Construction, Simplex Infrastructures and Valecha Engineering, paring its exposure to the construction sector to about 5 per cent from 11 per cent earlier. Mahindra & Mahindra and Tata Motors were the auto majors that took the exit. Profits were booked in previously prominent holdings such as Amtek Auto, Engineers India and Kesoram Industries. Dredging Corporation, HEG, HCL Infosystems, KEI Industries, LMW, Power Finance Corporation and Taj GVK were other stocks the fund chose to weed out from its portfolio.
The fund added to its exposure in the metals sector, picking up frontline players such as Tata Steel, SAIL and Sterlite. With the addition of Bharti Airtel, the fund’s overall exposure to large-cap stocks with a market capitalisation of over Rs 5,000 crore has increased to 70 per cent.
The fund also took a fancy to Dish TV, SpiceJet and Vishal Retail. A tiny exposure was taken in Alphageo India, which markets oil exploration data, seismic and reservoir data, among other things. Alstom Projects, Lanco Infratech, Praj Industries and MIC Electronics were among the new additions.
Holdings in leading companies such as ABB, BHEL, Larsen & Toubro, Siemens and Suzlon Energy were enhanced, while those in mid-sized companies such as Ceat, IVRCL Infrastructure, Kalpataru Power, Voltas, Patel Engineering and Subex Azure were reduced.