Mutual funds increase exposure in companies with no input cost pressures

As Indian corporates face higher raw material costs, mutual funds in October looked for companies that can pass on higher input costs to consumers or those firms which do not face such pressures.

Fund managers said companies’ operating margins are under pressure due to supply chain disruptions and strong commodity prices. L& T Infotech, Gateway Distriparks, ICICI Lombard General Insurance Company, Zee Entertainment Enterprises, Greenply Industries and HCL Technologies were among the picks of leading fund managers in October.

With broad market valuations considered stretched, the focus is on stocks, which are cheaper than their peers. Fund managers have also bought companies with incremental earnings growth and are trading at relatively lower valuations than their peers. ET takes a look at some of the changes in holdings of top fund houses.