5 Favorite Indian Stocks of Hedge Funds

MakeMyTrip Limited (NASDAQ:MMYT) is among the largest online travel agencies in India today. During the second quarter, the number of funds from our database bullish on the company inched down by one to 13 funds that held roughly 20% of the company’s stock at the end of June. MakeMyTrip is set to benefit from the rising per capita income, smartphone penetration and a fast-growing tourism market in India. The stock is currently trading at 14% below its 52-week high price of more than $23, though it has gained more than 20% over the last year. The company has a market value of just $861 million when compared to Priceline’s (NASDAQ:PCLN) market value of $71 billion, which is quite insignificant considering India’s strong growth story. Its attractive valuation makes it an investment case, as is evident from Cleartrip’srecent investment in MMT. MakeMyTrip Limited (NASDAQ:MMYT) achieved more than 450% annual transaction growth in their online hotels business. The company generated revenues of $121 million in the quarter ended June 2016, which was an increase of more than 29% over the year. Most analyst have rated the stock as a ‘Hold’.

ICICI Bank Ltd (ADR) (NYSE:IBN)’s stock performance has recently improved with the stock returning over 9% in the last six months. ICICI Bank Ltd (ADR) (NYSE:IBN)’s credit profile and financial performance metrics are getting better, with the advancement of the Indian economy. It is growing not only by increasing its physical distribution network but also through online channels. Though IBN’s NPA levels rose this quarter, it remains far below the levels shown by other public sector banks in India. Both the value of holdings and the number of fund houses we track having a position in IBN went down during the second quarter of 2016. Banking will be one of the key sectors to benefit from India’s higher GDP growth and ICICI Bank Ltd (ADR) (NYSE:IBN) is well positioned to leverage from this growth, due to its leadership in this sector. The bank has seen its stock price decline by more than 23% in the last two years due to deteriorating asset quality (the gross NPA ratio rose to 5.21% in fiscal 2016 from 2.56% in fiscal 2014) and stock valuation is not cheap, with a P/E of 23x. A total of 20 funds from our database held shares of the company at the end of June, down from 22 funds a quarter earlier, while the aggregate value of their holdings declined by 13% on the quarter to $332 million.

Videocon d2h Ltd – ADR (NASDAQ:VDTH) provides direct to home services (D2H) to subscribers in India. It was the first Indian media company to list on the NASDAQ, in April 2016. Videocon d2h Ltd – ADR (NASDAQ:VDTH) is the fastest growing DTH service provider in India and should benefit from the long term secular growth of the Indian market, as new regulations makes digitization of TV services mandatory in the country. The company’s revenues from operations has also improved over the years. In its most recent quarter, the company reported a subscriber base of 12.3 million, which is up more by more than 140% from 5.0 million in 2012. In the first quarter of fiscal 2017, its average revenue per subscriber also increased by 3.7% to INR 226 ($3.39) sequentially. The company is in talks to merge with Dish TV, which is India’s largest D2H player, with a market share of 26%. This transaction could consolidate the D2H segment leading to better margins for the entire industry. At the end of June, approximately 28% of Videocon’s total outstanding stock was held by 14 funds we track at Insider Monkey.

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