Shining Stars! Despite aggressive foreign fund outflows, these stocks remained FII darlings during last four quarters

Foreign Institutional Investors (FIIs), who once dominated the Indian stock market, have lately reduced their holdings to multi-decadal lows. The year 2024 witnessed one of the worst FIIs selling in the stock market's history, as their net buying in the Indian market dropped by 99% to ₹427 crore, compared to ₹117,000 crore recorded in 2023.

The relentless selling led to a single-digit return for Indian benchmark indices in 2024, at 8% as compared to nearly 20% in 2023.

Despite broad selling in the Indian stock market, overseas investors continued to add money to select stocks at a greater pace and consistency.

Here is a list of four stocks from the NIFTY 500 pack where FIIs increased their stake consistently over the last four quarters.

ABB India Ltd

In the September quarter (Q2 FY25), the company reported modest growth of 5% in the topline at ₹2,912 crore compared to ₹2,769 crore registered in the year-ago period. However, the company posted a better operational performance with EBITDA growth of 23% YoY to ₹540 crore compared to ₹438 crore. Lastly, the net profit for the quarter also rose by 21.6% YoY to ₹440 crore.

During the period from Q2FY24 to Q2FY25, foreign institutional investors increased their shareholding from 10.18% to 12.28%. The shares delivered impressive 45% returns in this period.

Atul Ltd

In Q3FY25, the company's top line rose 16% YoY to ₹1,392 crore, compared to ₹1,193 crore. On the operational front, the company posted an impressive 56% YoY growth at ₹242 crore, compared to ₹155 crore. The EBITDA margins, too, expanded more than 400 bps to 17.4%. Lastly, the net profit for the quarter also jumped more than 50% to ₹136 crore for Q2FY25 as against ₹89 crore logged in the corresponding quarter of the previous fiscal.

During the last four to five quarters, FII ownership in the company jumped 28.5% from 7.7% in Q2FY24 to 9.9% in Q2FY25. However, the share price performed poorly during the same period, declining 3.3% annually in 2024.

BASF Ltd

In Q2 FY25, the company reported a 14.6% YoY jump in total revenue to ₹4,248 crore. However, on the operational front, the company posted a 15% drop in operating profit to ₹201 crore, largely driven by higher operating expenses. Consequently, the company's net profit also declined 14% YoY to ₹128 crore for Q2FY25.

During the past four quarters, FIIs increased their holding from 3.1% to 4.4% in Q2FY25. The strong buying interest by FIIs led to an 82% jump in share prices for 2024 annually.

Blue Star India Ltd.

During Q2FY25, the company's total revenue jumped by 20.4% YoY to ₹2,275 crore, compared to ₹1,890 crore. Similarly, the EBITDA for the quarter also jumped 21.7% YoY to ₹149 crore owing to strong operational efficiencies. The net profit for the quarter also jumped 36% YoY to ₹96 crore as against ₹70 crore in the September quarter for FY24.

The strong operating performance led to rising interest from FIIs during the past four quarters. FII stock ownership jumped from 14.8% in September 2023 to 18.1% in September 2024. In the past year, the shares of Blue Star have delivered impressive returns of 135% for 2024.

Conclusion

FIIs have maintained their confidence in Indian markets with ample growth opportunities. Stocks in which they have been consistently increasing the stake have also shown strong fundamental performance over a long time.