The cut in stake in the auto ancillary has come at a time when the auto sector is expected to go through a bout of slowdown amid sluggish demand. The liquidity squeeze faced by non-banking financial companies has also led to fear of lower disbursements.
“High channel inventory is forcing auto companies to resort to production cuts. Tight liquidity conditions and weak sentiment are also weighing on demand,” said Edelweiss analysts in a note.
The other stocks where Jhunjhunwala has reduced his stake include Jubilant LifeSciences (25 bps), Titan (4 bps), Agro Tech Foods (10 bps), Federal Bank (13 bps), and TV18 Broadcast (93 bps).
While auto may not appeal to Jhujhunwala right now, pharma seems to be on his radar. His stake in the drugmaker Lupin has gone up by 16 bps to 1.9 per cent in the March quarter.
“Pharma is one sector where demand cannot go down. Most medicines used in US are made by Indian players. It is a sunrise industry, and it cannot become a sunset industry,” Jhunjhunwala said recently, while speaking at the launch of ITI Mutual Fund.
Jhunjhunwala has also entrenched his position in the luggage maker VIP Industries. His stake went up by 130 bps to 5 per cent in the March quarter. Luggage is another industry that analysts expect to do well as they see consumers shifting to organised players and also move towards premium luggage products.
Firstsource Solutions is the other stock where Jhunjhunwala increased his stake (36 bps) in the March quarter.
At the end of the March quarter, Jhunjhunwala held positions in 29 companies. Some of these include Rallis India (9.2 per cent stake), Escorts (8.16 per cent), NCC (10.7 per cent), SpiceJet (1.25 per cent), and CRISIL (5.49 per cent).
The data analysis took into account companies where Jhunjhunwala’s name was disclosed as an investor with more than 1 per cent shareholding.