The Hindu Business Line : Tata Mid Cap Fund: Building on construction

The mid-cap rally, which provided investors with good returns for the past few years, hit a speed-breaker in May-June. Even the pull-back since then has not brought life back to normal for several mid-cap stocks, with many still ruling 30 per cent lower than the May peak. Tata Mid Cap made many changes to its portfolio between July and October.

The fund has favoured sectors such as auto, cement, construction, hotels, capital goods, pharma and textiles and stepped up exposures in them. The laggards were consumer durables, consumer non-durables, media, software and textile products.

Ashok Leyland was the lone stock from the auto sector and it has accumulated it. In the same period, Punjab Tractors moved out completely.

Construction stocks, that had a sharp run-up on the back of some brisk activity across the country, found favour with the fund. Nagarjuna Construction, Jai Prakash Associates and Gammon India were retained.

The fund booked profit in Century Textiles and the stock moved out completely. Shree Cement and Chettinad Cement continue to enjoy the fund's faith.

Asset allocation to the hotel sector increased marginally and Indian Hotels, EIH and Jaypee Hotels represented this sector.

Capital goods underwent a minor re-jig, with the fund paring exposure to Lakshmi Machine Works, Emco and Stone India. Alfa Laval India was the only stock to enter the portfolio, while BEL and BEML exited the portfolio.

The fund lost interest in the KEI Industries stock and brought down holdings to one-tenth compared to the past quarter. Greaves Cotton and BOC India retained the place in the portfolio without much change while the fund increased the exposure to Jain Irrigation.

Though the pharmaceuticals sector has under-performed the market over the past year, the fund continues to retain interest in the sector and stepped up exposures in the portfolio. Marksans Pharmaceuticals was the only stock that moved out of the portfolio completely.

The fund booked profits in the software stocks that had a sharp run this quarter on back of good results. Moving out of the portfolio were Educomp Solutions, HCL Technologies and Mphasis BFL.

The fund reduced exposure to i-flex solutions, Hinduja TMT and Megasoft. In the consumer non-durables space, it has trimmed exposures in Murudeshwar Ceramics and CCL Products.

Suresh Parthasarathy

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