Series 99 – Portfolio Update: Sectoral Positioning and Expectation

Over the last few months, the portfolio has been aligned to overweight the following sectors:

1. Banking (Large Banks): We anticipate credit growth to pick up due to recent policy changes.
2. Pharma and Healthcare: Despite underperformance in the last 3 months due to tariff news, we believe the final tariffs will not be punitive. Clarity is expected in the next financial year starting April 2025
3. Consumer: A mix of staples and discretionary

Today the Portfolio Positioning has bias towards large caps avoiding exposure to: PSUs, Infrastructure, and Construction due to potential elongated working capital cycles. We have also streamlined our portfolio by reducing the number of holdings from 38-40 to 28-30, thereby increasing our concentration on the top 10 exposures. This strategic decision was made in anticipation of narrowing earnings. We foresee a significant market shift this year, with returns being driven more by specific companies rather than overall market sentiment.

Fundamentally on the Performance Highlights (3QFY24-25)- Portfolio has a Topline Growth: 15.9% (rolling 4Q basis),  PAT Growth: 20.9% (rolling 4Q basis) and  Gross Margin Increase: 4.2% YoY . The recent last two month’s underperformance is mainly due to the pharma tariff announcements and the narrative that was built around it. We expect this sentiment to normalize soon with a pick up on returns and have not made structural reallocations within the pharma and healthcare sector.  The increasing margin profile at the portfolio level gives us even more confidence in outperforming the index this year.

We keep sharing the weekly updates on our fund on a regular basis. If you have any queries regarding the fund you may write back to [email protected]

These weekly episodes are now available in our website for your quick read and you may access the same in the below link.

Weekly Enlightenment Archives – ITUS Capital