MF Select

Reason for recommendation 

This is an open-ended equity scheme which seeks to generate long-term capital appreciation by investing in mid-cap companies, dominantly. The scheme currently invests around 75 per cent of its corpus in mid-cap companies. 

The fund is quite concentrated towards the mid-cap sector, however, the portfolio mix of the fund suggests a good sectoral diversification. Scheme invests 16.7 per cent of its assets in the financial sector which is followed by automobiles, chemicals and FMCG, where the scheme has invested around 12.6 per cent, 10.6 per cent and 10 per cent, respectively. 

The major holdings of the scheme include Phillips Carbon, Sterlite Technologies and Dewan Housing Finance. We see that Phillip Carbon would be one of the key beneficiaries of the shortage carbon black in India. Going ahead, Phillip's strategy of increasing volumes of speciality products would aid margin. Further, in the case of Sterlite Technologies, the order book growth coupled with growing demand suggests robust revenue growth. The recent European acquisition of Metallurgica Bresciana S.p.A (Metallurgica) is expected to bode well for the company. Even with the growing demand environment, DHFL is expected to witness a loan book growth in the coming years. Bearing in mind all these aspects, the fund seems to be a value buy for our valued investors. The scheme is suitable for aggressive investors.