Five Indian Stocks Hedge Funds Are Fond of

On the fifth spot we have WNS (Holdings) Limited (ADR) (NYSE:WNS), in which 12 funds held shares at the end of 2017, compared to nine funds and 13 funds a quarter earlier and a year earlier, respectively. Since the beginning of 2018, WNS (Holdings) Limited (ADR) (NYSE:WNS)’s stock has surged by 19%, getting a boost in January when the company reported better-than-expected results for the fiscal third quarter. WNS (Holdings) Limited (ADR) (NYSE:WNS), a provider of business process management services, posted EPS of $0.66 and revenue of $185.20 million, better than the consensus estimates of $0.50 and $175.85 million, respectively. The revenue advanced by 32.5% on the year, marking the fifth consecutive quarter of increasing revenue growth rate.

Then there’s Tata Motors Limited (ADR) (NYSE:TTM), which saw the number of bullish investors inch down by one over the quarter and by nine over the year to 13 funds that disclosed long positions as of the end of 2017. While headquartered in India, Tata Motors Limited (ADR) (NYSE:TTM) is an auto manufacturer with a global reach and a strong brand portfolio that includes iconic Jaguar and Land Rover brands. In connection with uncertainty surrounding Brexit and soft demand for diesel vehicles, Jaguar Land Rover is about to eliminate 1,000 jobs of short-term contract workers at the Solihull plant that builds Range Rovers and the Land Rover Defender SUV. In March, Tata Motors Limited (ADR) (NYSE:TTM)’s wholesales increased by 18% on the year to 153,156 vehicles, with Jaguar Land Rover global wholesales amounting to 76,221 vehicles. On the Indian market, Tata Motors saw a growth of 35% on the year to 69,440 units, with both commercial and passenger vehicles sales appreciating by 37% and 31% on the year to 20,266 units and 49,174 units, respectively.

The number of hedge funds from our database long Infosys Ltd ADR (NYSE:INFY), declined by four to 17 during the last three months of 2017; a year earlier, there had been 18 funds with stakes in the company. The stock of the provider of consulting and IT services has jumped by over 20% in the last 12 months. Recently, Infosys Ltd ADR (NYSE:INFY) declared a dividend of $0.31 per ADS and a special dividend of $0.15 per ADS; the company’s stock has a yield of 2.50%. In a Bloomberg interview earlier this month, Infosys Ltd ADR (NYSE:INFY)’s CEO Salil Parekh, who was appointed in January, said that the company has to sacrifice profit margins by investing in technology and skills in order to gain more opportunities in the future. The company has recently said that it expects operating margins this year to decline to between 22% to 24%.

The two most popular Indian stocks among hedge funds are banks. ICICI Bank Ltd (ADR) (NYSE:IBN) and HDFC Bank Limited (ADR) (NYSE:HDB) both have 24 funds bullish on their stocks as of the end of last year. ICICI Bank Ltd (ADR) (NYSE:IBN) saw the number of long investors fall by two both over the quarter and over the year, while in HDFC Bank Limited (ADR) (NYSE:HDB) this number slid by three compared to the end of September and by one compared to the end of 2016. Both banks are the largest in the country in terms of total assets and are expected to benefit from the country’s demographics and expanding middle class.

ICICI Bank Ltd (ADR) (NYSE:IBN) has recently found itself in hot water as India’s Central Bureau of Investigation launched a probe of its lending practices. According to Reuters, is alleged that ICICI Bank Ltd (ADR) (NYSE:IBN)’s CEO Chanda Kochhar might be involved in nepotism, as a consortium of banks including ICICI provided a loan to Videocon Group chairman Venugopal Dhoot, who invested around $9.80 million Nu Power Renewables, a company owned by Chanda Kochar’s husband Deepak Kochhar.

HDFC Bank Limited (ADR) (NYSE:HDB) has recently reported its fiscal fourth-quarter results, with net profit growing by 20.2% on the year to Rs 4,799 crore ($724.81 million), which was higher than analysts’ expectations of Rs 4,860 crore. The bank also saw a stable asset quality, with 1.3% of gross non-performing assets at the end of March, versus 1.29% a quarter earlier. HDFC Bank Limited (ADR) (NYSE:HDB) also reported a loan growth of 18.7% and an 18% growth in Net Interest Income to Rs 10,658 crore, slightly lower than estimates of Rs 10,877 crore.

Disclosure: none