DIIs' Strong Support to Indian Equity Market: 5 Stocks That Saw Significant Stake Increases
Domestic institutional investors (DIIs) continued to provide strong support to the Indian equity market during the July-September quarter and remained net buyers, purchasing domestic equity worth Rs 1,69,397.7 crore . They continued to invest in domestic equities even when the broader market faced pressure, with the Nifty 50 declining around 5.2% during the quarter. The contrast highlights the role of domestic investors in supporting the market during a period of weakness. However, DII buying was not limited to broad market exposure. Some companies saw a sharp increase in domestic institutional ownership during the quarter, and in this article, we look at five such stocks where DIIs raised their stake by more than 10 percentage points, with each company having a market capitalisation of at least Rs 5,000 crore, to rule out any random and very small companies. So, letâs try to figure out what made the DIIs raise their stake in these companies at such a pace. RHI Magnesita India Ltd. holds more than 30% market share as the manufacturer and supplier of high-grade refractory products, systems, and solutions in India. The company is further strengthening its position in higher-value refractory products, with flow control products contributing around 35% of its revenue. RHI is also working on backward integration through two quartzite mines, Chiraipani and Bhikampali, which are expected to improve raw material supply and reduce costs. DIIs increased their stake by 11.73 percentage points, taking the total holding to 26.07% at the end of Q2 FY27. Among the notable DII investors, SBI Small Cap Fund bought an 8.10% stake, Bandhan Flexi Cap Fund bought another 3.64% stake, and Clarus Capital purchased a 1.97% stake during the quarter. RHI is building a greenfield mineral processing facility in Odisha via its joint venture, MINPRO, with Khemka Refractories. The management said that the initial investment would be around Rs 35 crore over two years. Production is expected to begin in the last quarter of FY27. This facility is expected to generate Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) margins of 8% to 10%. Furthermore, the company was in the final stage of negotiations for the coke oven project, while glass and silica projects were expected to progress in the second half of FY27. Revenue increased 6% YoY to Rs 1,014 crore, while EBITDA increased 42% to Rs 147 crore. EBITDA margin improved to 14.5% from 10.8%, and net profit nearly doubled to Rs 65 crore from Rs 35 crore. Return on capital employed (ROCE) stood at 6.46%, below the peer median of 13.58%, while the debt-to-equity (D/E) ratio was 0.13x against the industry median of 0.04x. Both metrics indicate relatively poor capital efficiency and use of financial leverage. Management retained its full-year EBITDA margin guidance of 13% and expects volume growth of 7% to 8%. Note: Q2FY27 Financial Results are yet to be announced The stock is trading at a price-to-earnings (P/E) of 39.22x, compared with the industry median of 28.57x, indicating the stock is relatively more expensive than its peers. Gujarat Themis Biosyn Ltd. is in the business of manufacturing pharmaceuticals and medicinal chemicals. The company is the first in India to start commercial production of Rifampicin, an anti-tuberculosis drug, DIIs increased their stake by 11.48 percentage points, taking their total holding to 12.65%. The top three investors: Quant Manufacturing Fund raised its holding from 1.15% in Q1FY27 to 7.47% in Q2FY27. Then Kotak Mahindra Life Insurance Company bought a 2.17% fresh stake in the company, and Bank of India Flexi Cap Fund also bought a 1.63% stake during the quarter. The proposed acquisition of Japan-based MicroBiopharm is expected to give Gujarat Themis access to precision fermentation, peptides, plasmids, enzyme engineering, and capabilities in oncology and immunosuppressants. Management said most of these technologies are already commercialised, and the acquisition will help the company have a 7-8 year head start in building CDMO capabilities. Gujarat Themis is also acquiring 13 anti-TB and anti-infective brands from Sanofi, which currently have a market across 55 countries in Europe, the Middle East, and Africa. The transition is expected to take up to three years, with manufacturing gradually moving to contract manufacturers under the companyâs control. The company also doubled its fermentation capacity during the quarter, and in August, the capacity started operating at full scale, helping the company commercialise its entire production. Revenue increased 22.1% YoY to Rs 43.8 crore in Q1 FY27 from Rs 35.9 crore a year ago, while EBITDA surged 49.4% to Rs 20.8 crore from Rs 13.92 crore during the period. EBITDA margin improved by 867 basis points to 47.5% from 38.81% a year earlier, reflecting strong operating efficiency of the company. Net profit also grew 22.1% to Rs 11.1 crore from Rs 9.1 crore a year ago. ROCE stood at 18.1%, above the industry median of 15.07%, while the D/E ratio was 0.56x against the peer median of 0.19x, reflecting better capital efficiency and leverage. Note: Q2FY27 Financial Results are yet to be announced The stock is trading at a P/E of 103.64x, significantly above the industry median of 32.02x, indicating the stock is relatively expensive to its peers. Tenneco Clean Air India Ltd. is a part of the leading US-based Tenneco Group known for its major automotive business. The company supplies clean air and powertrain solutions, and advanced ride technologies, including shock absorbers and suspension systems. The company is strengthening its position in advanced suspension technologies through its DCx DaVinci platform, which offers improved ride comfort at an affordable cost. DIIs increased their stake by 11.24 percentage points during Q2FY27, taking the total holding to 22.69% at the end of the quarter. Among the prominent investors, SBI Nifty Smallcap 250 Index Fund bought a 6.21% fresh stake in the company, while Axis Mutual Fund Trustee bought another 1.79% stake, and HDFC BSE 500 Index Fund purchased a 1.57% stake during the quarter. Tenneco added four new customers to the Advanced Ride Technologies business during the June quarter. The companyâs passenger vehicle shock absorbers and struts market share rose from 52% to 55% in FY26. Tenneco also introduced DCx32, a smaller version of DaVinci technology. The company secured a spark plug order from a leading passenger vehicle manufacturer, along with new exhaust and CNG platform programmes. Export wins included an order from a European all-terrain vehicle manufacturer and a heat shield order from Tenneco America. The company plans to spend Rs 350 crore to Rs 450 crore on capex in FY27, including investments in two previously announced plants. The management indicated that the existing capacities are already running above 90% in Advanced Ride Technologies and 80% in Clean Air and Powertrain; thus, this capex investment could support double-digit revenue growth. Revenue increased 20.2% YoY to Rs 1,545 crore, while EBITDA rose 7.9% to Rs 247 crore. However, net profit declined 1.7% to Rs 165 crore. However, management indicated that there was a one-time benefit in the profit generated during Q1FY26, excluding which the profit growth for Q1FY27 would have been similar to the EBITDA growth. ROCE stood at 60.76%, significantly higher than the industry median of 16.44%, while the D/E ratio stood at 0.04x, compared with the peer median of 0.38x, reflecting capital efficiency and wise use of financial leverage by the business. Note: Q2FY27 Financial Results are yet to be announced The stock is trading at a P/E of 29.9x, slightly above the industry median of 27.13x. however, the companyâs price/earnings to growth (PEG) ratio of 1.68x is also higher than the industry median of 0.88x, reflecting that the stock is relatively overpriced compared to its peers. Diamond Power Infrastructure Ltd. is engaged in the manufacturing of power cables , conductors, data centre cables, EHV cables, and more. The company has Indiaâs largest single-location cable platform with the integrated manufacturing facility spread across 130 acres in Vadodara. DIIs increased their stake by 10.98 percentage points, taking the total holding to 11.21% at the end of Q2 FY27, compared with 0.23% in the previous quarter. Among the notable investors, Motilal Oswal Focused Fund bought a 3.73% stake during the quarter, while HDFC Flexi Cap Fund purchased a 2.20% stake. The order book of the company stood at Rs 3,735 crore at the end of July-September. Orders for conductors contributed 46% of the total orders, while medium-voltage cables contributed 36% of the order book. Amongst the key wins during the quarter, Diamond Power won an additional order for medium and low voltage cables worth Rs 152 crore from AEML Mumbai. Then the company won a Rs 195 crore order for 1,370 km of 11 Kilo Volt (KV) cables for the PGVCL coastal underground schemes. The company is also investing Rs 170 crore across two phases for building an integrated polymer complex with a capacity of 84,500 Metric Tonnes Per Annum (MTPA) to reduce dependence on purchased compounds and improve margins. Revenue surged 135% YoY to Rs 1,031.9 crore in Q2FY27, from Rs 438.3 crore a year ago. EBITDA increased 189% YoY to Rs 133 crore from Rs 46 crore a year earlier, while net profit surged 289% YoY to Rs 108 crore from Rs 27.7 crore a year ago. During Q2FY27, data centre cables added revenue worth Rs 242 crore, which was insignificant even during the first quarter of the fiscal year 2027. This independent product line contributed to 23% of the total revenue of the quarter. ROCE of the company stood at 10.4%, below the industry median of 21.5%, while the D/E ratio was at 2.54x against the industry median of 0.44x, indicating relatively poor capital efficiency and poor use of financial leverage. The stock is trading at a P/E of 87.04x, significantly above the industry median of 23.32x; even the PEG ratio is at 1.15x, higher than the industry median of 0.22x, indicating that the stock is relatively expensive compared to its peers. KFin Technologies Ltd. is a tech-first financial services platform offering registrar and transfer agency services to mutual funds, asset managers, corporate issuers, along with services like investor servicing, alternative investment fund (AIF) administration, and pension-related services. The company holds a strong position in the issuer solutions business, with a 50.2% share of the market capitalisation of NSE 500 companies. DIIs increased their stake by 10.23 percentage points during Q2FY27, taking their total holding to 37.54% at the end of the quarter. Among the prominent investors, Mirae Asset Small Cap Fund increased its holding from 1.79% in Q1FY27 to 6.31% in Q2FY27, while HSBC Small Cap Fund raised its stake from 1.28% to 3.92% during the same period. Summit Equity Long-Short Fund also bought a fresh 3.26% stake during the quarter. The company added 437 corporate clients during Q2FY27, taking its total client base to 11,712, up 23.8% YoY. Investor folios increased 11.1% to 182 million. The company also had 756 AIF funds on its platform, with a 37.2% market share. National Pension System subscriber base grew 41.2% YoY to 2.53 million. KFin Technologiesâ overall average assets under management (AAUM) grew 15.1% YoY, compared with industry growth of 13.1%, taking the companyâs market share to 33.1%. However, equity AAUM growth stood at 14.3%, slightly below the industryâs growth of 15%, with the companyâs market share in equity AAUM at 32.8%. Revenue increased 29.9% YoY to Rs 401.8 crore in Q2FY27, while EBITDA rose 18.7% to Rs 161 crore. Net profit increased but at a slower pace compared to revenue and EBITDA, rising 7.5% to Rs 100.3 crore. Having said that, EBITDA margin contracted to 40.1% from 43.9% a year earlier. ROCE stood at 29.19%, at par with the industry median, while the D/E ratio was 0.05x, slightly higher than the industry median of 0.01x. The stock is trading at a P/E of 43.4x, above the industry median of 37.4x. However, the PEG ratio is at 2.24x, marginally below the industry median of 2.30x, indicating that the stock could be relatively undervalued if adjusted for growth. While DIIs raising stakes above 10 percentage points in all these stocks reflects rising institutional interest, whether the same translates into sustained business growth or not is something investors need to keep an eye on. While capacity expansions, new orders, acquisitions, and improving market share add to business growth, execution and margin improvement will remain key factors to watch, along with elevated valuations. Investors should track whether earnings growth keeps pace with DIIâs expectations and whether companies deliver on their expansion plans; for that, add these stocks to your watchlist now. 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 educational 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 her dependents do not hold the stocks discussed in this article. The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities, or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives and resources, and only after consulting such independent advisors as may be necessary.