UTI Mutual ups IT, oil holdings in January

UTI Mutual Fund's January portfolio showed increased holding in information technology and oil companies. The mutual fund reduced its exposure to pharmaceutical and textile companies.

Robust offshore orders, rising recruitment, and visibility of future earnings led the fund to raise its holding in software companies.

An optimistic view on the sector led the fund house to continue increasing holding in software companies such as HCL Technologies, Subex Systems, Infosys Technologies, and Visualsoft Technologies.

Sanjay Dongre, fund manager said, "The offshoring demand continues to remain strong as indicated by strong hiring...Billing rates have been stable with an upward bias, though new clients are coming at higher than average billing rates."

Buying in Infosys was due to over 5 per cent fall in the stock on Jan. 12, after the company posted a net profit of Rs 6.49 billion for October-December, up 31 per cent on year, but missing market expectations of Rs 6.57 billion. The sharp fall offered attractive investment opportunity.

Dongre said, "Going forward, the margin of IT companies may be under pressure on account of rising manpower costs and currency fluctuations. However, it could be partly neutralized by increase in productivity and utilisation levels. We continue to stick to the companies characterised by 'size' and 'quality.'

In January, HCL Technologies bagged a multi-million-dollar, multi-year contract from Europe's leading electrical retailer DSG International resulting to fund buying.

In January, the mutual fund raised exposure to Gujarat Gas Co, Bharat Petroleum Corp, Chennai Petroleum Corp., and Oil and Natural Gas Corp.

"We expect the margins of oil marketing companies to rise. The crude has already started slowing down from peak levels of $71. Any further fall, will further improve the margins of oil marketing companies," a fund official said.

Buying in ONGC shares was due to its aggressive expansion plans. In January, ONGC entered into an agreement with Shell for exploration, production, and coal gassification in India.