DIIs Scoop Up Select Stocks Despite Q4FY25 Market Downturn
Mutual funds actively purchasing these 3 equities during market downturns
In the face of plunging equities early this year, Domestic Institutional Investors (DIIs) showed no fear and kept on buying like they've never emptied their wallets before. While the first three months of 2025 saw a hefty net equity purchase of ₹1,16,082 crore by DIIs, the numbers started to dwindle as the quarter wore on. Alas, DIIs persisted in buying up select stocks significantly, increasing their totals to over 15% stakes in select companies throughout the quarter.
This article will highlight three such stocks and explore the reasons why DIIs inserted themselves so firmly in the driver's seat.
#1 Team Lease Services Ltd. (TEAMLEASE)
Team Lease Services has been a pioneer in the employment servicing industry, offering staffing solutions, training, regulatory compliance, and payroll processing services. DIIs jumped on board in Q4FY25, boosting their ownership in this firm by a whopping 10.54% points, taking their total holdings to 47.65%.
One of the reasons for DIIs' rash expansions in Team Lease may be its swift profit recovery. After experiencing a slowdown in Q1FY25, the profits rebounded in Q3FY25. The net profit growth, while modest at 2.33% YoY, indicates the company's resilience amidst ever-changing market conditions.
Team Lease is currently trading at a Price-to-Earnings (P/E) ratio of 31.8. Though a bit overpriced compared to the industry average of 27.0, it pales in comparison to its 10-year median of 50.4. ICICI Prudential Technology Fund (6.94% stake), Franklin India Balanced Advantage Fund (7.02% stake), and SBI Retirement Benefit Fund - Aggressive Plan (4.58% stake) were top mutual fund picks of Q3FY25.
#2 Centum Electronics Ltd. (CENTUM)
Centum Electronics, a significant player in the electronics system designing and manufacturing sector, witnessed an increase in DIIs' stakes by 7.30% points during Q4FY25, pushing the total DII holding to 15.36%. As a multi-sector behemoth, Centum has served industries like defense, aerospace, medical, transportation, and space.
The big question is why investors poured so much capital into this company with losses since Q4FY24. Perhaps it's the continued revenue growth, robust order books, prompt debtor days, or reasonable working capital requirements that have caught the eye of DIIs.
Centum reported an impressive 13% quarter-to-quarter revenue growth in Q3FY25, with a 6% year-to-date increase through March 2025. The company also boasted a strong pipeline of orders for both Electronics Manufacturing Services and Build to Spec Services as of February 2025. The top mutual fund picks for Centum in Q4FY25 included HDFC Mutual Fund - HDFC Multi Cap Fund (increased stake from 4.33% to 8.23%), 3P India Equity Fund 1 (4.39% stake), and 3P India Equity Fund 1M (1.08% stake).
#3 TBO Tek Ltd. (TBO TEK)
TBO Tek, an online travel booking platform, saw a surge of 6.10% points in DII holdings, pushing the overall total to 17.88%. Operating primarily in the Business-to-Business (B2B) travel segment, TBO Tek offers airline and hotel reservation services.
The reasons for DIIs' interest in this stock are somewhat elusive. However, it's worth noting the stock's low P/E ratio, high ROCE and ROE, and improving sales growth. With a P/E of 57.2x, TBO Tek may be an enticing value play, particularly since it's considerably cheaper than its 10-year median of 84.0x. Top mutual fund picks for TBO Tek in Q4FY25 included Nippon Life India Trustee Ltd.-A/C Nippon India Smallcap Fund (3.46% stake), SBI Technology Opportunities Fund (3.33% stake), and ICICI Prudential India Opportunities Fund (2.40% stake).
Chasing Value in a Down Market
While DIIs' significant investments in these chosen stocks might be a clear sign of future potential, the selected investments are questionable given the companies' performance. It will be intriguing to see if DIIs continue to ride this wave, especially when they are constantly reducing their overall equity investments each month.
As ever, this article is provided merely for entertainment and educational purposes, and should not be construed as investment advice. Always consult your financial advisor before making investment decisions.
Maumita Mitra is an experienced financial writer who excels at breaking down complex investment concepts for a broad audience. With a keen eye for detail and an aptitude for clear communication, she aims to bring the world of finance to readers in an accessible manner.
Disclosure: Neither the author nor their dependents hold the stocks discussed in this article.
Source: screener.in
- Despite the market downturn in Q4FY25, Domestic Institutional Investors (DIIs) continued to invest, notably increasing their ownership in companies like Team Lease Services, Centum Electronics, and TBO Tek.
- In the case of Team Lease Services, DIIs boosted their ownership by 10.54%, dramatically increasing their total holdings to 47.65%.
- The resilience of Team Lease Services, as indicated by its modest 2.33% year-on-year net profit growth, may have been a factor attracting DIIs.
- While Centum Electronics has reported losses since Q4FY24, DIIs have still increased their stakes significantly, pushing the total DII holding to 15.36%.
- The continued revenue growth, robust order books, prompt debtor days, and reasonable working capital requirements of Centum Electronics could be reasons for the interest from DIIs.
- TBO Tek, an online travel booking platform, saw a 6.10% point increase in DII holdings, pushing the overall total to 17.88%.
- The low P/E ratio, high ROCE and ROE, and improving sales growth of TBO Tek could explain the interest from DIIs in this stock.
- DIIs' significant investments in these chosen stocks could be a sign of future potential, but it remains questionable given the companies' performance.
- As always, this article is meant for entertainment and education purposes and should not be construed as investment advice. It is important to consult a financial advisor before making investment decisions.
