By Maumita Mitra
\When everyone was offloading Indian equities earlier this year, Domestic Institutional Investors (DIIs), including mutual funds, were buying them like never before. In the first three months of this calendar year 2025, or during the Q4FY25, DIIs were net buyers in the equity segment.
DII’s net equity purchase stood at ₹1,16,082 crore during the quarter however, with each passing month, the numbers kept on decreasing. For instance, in January, DII’s net equity purchase stood at ₹55,074 crore, which dropped to ₹47,550 in February, and tanked to ₹13,458 in March 2025.
In this month, until 25th April, DIIs have purchased equities worth ₹10,621 crore, which shows another dip from the previous month’s number. While DIIs kept on decreasing their overall equity purchases amidst volatile market conditions, they upped their holdings in select stocks significantly enough, through the Q4FY25.
In this article, we will focus on three such stocks that DIIs aggressively bought in the previous quarter and now hold more than 15% stakes in the companies.
#1 Team Lease Services Ltd. (TEAMLEASE)
Team Lease Services has been a pioneer in the employment servicing industry. It has been offering staffing solutions, training, regulatory compliance, and payroll processing services. In the Jan-Mar 2025 quarter, DIIs raised their stakes in this firm by 10.54% points, taking the overall holding to 47.65%.
One of the probable reasons for the DIIs to increase their stakes in this company can be its rising profits. After slowing down during the Q1FY25, the firm again reclaimed its profit level in Q3FY25.
The growth in net profit year-on-year (YoY) dipped drastically during the Q1FY25. However, again in Q3FY25, the company witnessed a positive net profit growth YoY, though only 2.33%. With the rise in the profits, the earnings per share (EPS) also increased from ₹14.66 in Q2FY25 to ₹16.95 in Q3FY25.
The interesting thing to notice is that the firm achieved the growth in its profit even when the sales growth slowed down during Q3FY25.
Team Lease is currently trading at a Price-to-Earnings (P/E) of 31.8, a bit above the industry P/E of 27.0. However, it is way cheaper than its 10 year median of P/E of 50.4.
The three top mutual fund schemes which bought stakes in Team Lease during the March 2025 quarter are –
- ICICI Prudential Technology Fund purchased a 6.94% stake
- Franklin India Balanced Advantage Fund bought a 7.02% stake
- SBI Retirement Benefit Fund – Aggressive Plan bought a 4.58% stake
#2 Centum Electronics Ltd. (CENTUM)
Centum Electronics, one of the biggest companies in the electronics system designing and manufacturing space, saw DII’s stakes rising by 7.30% points during Q4FY25, taking overall DII holding to 15.36%. Centum serves multiple sectors, ranging from defense, aerospace, medical, transportation, and space.
This stock is an interesting buy by the DIIs because the firm has been generating losses since Q4FY24. During Q2FY25, the firm managed to negate its losses, but again during Q3FY25, the losses expanded, taking YoY net profit growth to negative 155%.
While it is quite difficult to figure out what drives DIIs to invest in this stock, some of the factors that might be working are increase in revenues, a strong order book, debtor days improvement, and working capital requirement.
Centum has witnessed a quarter-on-quarter (QoQ) growth in its revenue (adjusted for the gross value of certain contracts) by 13% in Q3FY25, and a 6% growth YoY in 9MFY25.
The company also reported a strong pipeline of orders for both Electronics Manufacturing Services and Build to Spec Services as of February 2025.
The company also improved its debtor days from 108 days to 76.3 days and reduced its working capital requirement from 59.5 days to 41.4 days.
The three top mutual fund schemes that bought or raised stakes in the company during Q4FY25 include –
- HDFC Mutual Fund – HDFC Multi Cap Fund raised stake from 4.33% to 8.23%
- 3P India Equity Fund 1 raised stake to 4.39% from the previous quarter’s 2%
- 3P India Equity Fund 1M bought 1.08% stake
#3 TBO Tek Ltd. (TBO TEK)
TBO Tek, the online technology platform for travel bookings, witnessed a 6.10% points surge in its DII holding during Q4FY25, which increased its overall DII holding to 17.88%. This company offers airline and hotel reservation services in the Business-to-Business (B2B) segment.
While it is difficult to pinpoint any particular reason that is attracting DIIs towards this stock, here are certain factors that the DIIs might be looking at.
The stock is trading near its all-time low of ₹986. Its P/E is at 57.2x, which is a bit higher than the Industry median, however, way lower than the 10 year median of 84.0x. This indicates the stock might be trading cheaper.
Both Return on Capital Employed (ROCE) and Return on Equity (ROE) are significantly high at 42.9% and 46.0%, respectively. TBO Tek’s ROCE is almost double the industry median of 24.7%
Another factor that may have attracted investors is improving sales growth. In Q2FY25, the YoY sales growth was 27.92%, up from 21.45% during Q2FY25, and in Q3FY25, it further rose to 29.17%. That said, the profit growth has been sluggish for the company, and in Q3FY25, it even turned negative at 8.03%.
The top three mutual fund schemes that purchased or raised stakes in TBO Tek during Q4FY25 are –
- Nippon Life India Trustee Ltd.-A/C Nippon India Smallcap Fund bought 3.46% stake
- SBI Technology Opportunities Fund raised its stake to 3.33% from 2.51% in the previous quarter
- ICICI Prudential India Opportunities Fund bought 2.40% stake
Other Stocks Bought by DIIs
Apart from these three, DIIs also purchased two other stocks and raised their respective stakes during the fourth quarter of FY25. These are
Wrapping up
In a falling market, DIIs’ significant investments in these particular stocks may suggest potential in them. However, the picks are pretty interesting given the performance of the companies. It will be interesting to see whether DIIs keep on banking on these selected stocks for long, especially when they are rapidly reducing their equity investments, month on month.
We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Maumita Mitra is a seasoned writer specializing in demystifying the world of investment for a broad audience. She has a keen eye for detail and a knack for explaining complex financial concepts in the simplest manner possible.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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