Four stocks that saw a sharp rise in DII holding in September quarter
Domestic institutional investors (DIIs) may not make much noise, but they do a lot of the heavy lifting in Indian equities.
Mutual funds, insurers and pension funds have emerged as major market participants, supported by steady monthly inflows through systematic investment plans (SIPs) and other long-term savings. This domestic money provides a cushion when foreign investors pull back.
In the September quarter, DIIs raised their stakes sharply in a handful of companies. We analysed shareholding data to identify four stocks that saw some of the biggest increases in DII ownership.
Spectrum Electrical Industries
Spectrum Electrical Industries manufactures components for electrical product brands, including miniature circuit breaker (MCB) parts, distribution boards, modular panels, bulb holders and metal junction boxes. It also offers services such as electroplating, injection moulding, metal stamping and powder coating, allowing customers to source design and manufacturing solutions from a single partner.
The company has expanded into electric vehicle (EV) chargers and tooling solutions to broaden its product portfolio.
DII holding rose to 7.62% in the September quarter from 0.36% in June. Much of the increase appears to be linked to a preferential issue approved by the board in July 2026 and cleared by shareholders at an extraordinary general meeting on 20 August 2026.
The business has been growing rapidly. In Q1FY27, revenue rose 80% year-on-year (YoY) to ₹154 crore. Ebitda more than doubled to ₹24.2 crore, with the margin expanding 197 basis points (bps) to 15.68%. Net profit grew 132% to ₹13 crore.
The longer-term trend is similar. Trailing 12-month revenue stands at about ₹680 crore, against ₹400 crore in FY25. Trailing Ebitda of around ₹104 crore is nearly double the FY25 figure of ₹53.3 crore.
The next catalyst is debt reduction. Most of the proceeds from the preferential issue are earmarked for debt repayment, which could lower finance costs and strengthen the balance sheet as the business scales up. The remaining funds will support general corporate needs and growth plans.
However, copper, steel and polymer prices remain key risks. Investors should watch whether the company can sustain its margins as revenue expands.
Spectrum combines strong earnings growth with a capital-raising exercise that has materially changed its shareholder base. The extent of debt reduction and the sustainability of margins will be important indicators of whether institutional interest persists.
Meesho operates an online marketplace connecting small sellers with value conscious shoppers across India, particularly in smaller towns and rural markets. Its business also includes initiatives such as Meesho Mall and content commerce, alongside newer ventures in financial services and groceries.
DII holding increased to 13.60% in the September quarter from 9.14% in June, a gain of 4.46 percentage points.
Meesho maintained strong growth momentum in Q1FY27. Revenue from operations rose 48% YoY to ₹3,713 crore, while net merchandise value (NMV) grew 34% to ₹11,614 crore. The platform processed 72.5 crore orders, up 29%. Annual transacting users reached 27.4 crore, while annual order frequency improved to 10.3 from 10.1 orders per user.
Losses also narrowed. Net loss fell to ₹133 crore from ₹289 crore a year earlier. Contribution margin improved to 4.6% of NMV, while the marketplace's adjusted Ebitda loss stood at ₹139 crore, or 1.2% of NMV. Management described these as the strongest levels since listing, despite higher fuel costs and wage increases in some states.
The challenge is turning scale into profitability. The new initiatives business remains a drag, with its adjusted EBITDA loss more than doubling YoY to ₹39 crore. Free cash flow over the trailing 12 months improved to negative ₹537 crore from negative ₹633 crore in the previous quarter.
Meesho is embedding artificial intelligence across product discovery, seller growth, logistics and engineering. However, continued investments in technology, logistics and user acquisition, along with funding for its grocery subsidiary, are likely to keep free cash flow under pressure in the near term.
The key monitorables are sustained improvement in contribution margins and a narrowing of losses in newer businesses.
Meesho's growth and improving unit economics offer reasons for institutional interest, but the company remains loss-making. The rise in DII ownership signals interest in its growth potential rather than demonstrated profitability.
Neogen Chemicals manufactures specialty organic and inorganic chemicals for industries such as pharmaceuticals and agrochemicals. Organolithium compounds form an important part of its organic chemicals portfolio.
The company is also building a battery chemicals business through subsidiary Neogen Ionics, focusing on lithium electrolyte salts and electrolytes. It has partnered with Japan's Morita Investment in a joint venture to manufacture lithium electrolyte salt, with plants coming up at Dahej and Pakhajan in Gujarat.
DII holding increased to 23.43% in the September quarter from 19.60% in June, a gain of 3.83 percentage points.
Neogen reported strong Q1FY27 results. Consolidated revenue rose 34% YoY to ₹250 crore. Organic chemicals revenue grew 18% to ₹194 crore, while inorganic chemicals revenue jumped 158% to ₹57 crore. EBITDA increased 53% to ₹48.2 crore, with the margin expanding 260 bps to 19.3%. Net profit rose 67% to ₹17.1 crore. Finance costs increased about 64% as the company funded its capital expenditure.
The performance came despite a temporary shutdown of the Dahej plant following a fire. Toll manufacturing helped maintain supplies, and reconstruction has been completed, with trial runs underway. Insurance recoveries have reached ₹164 crore so far. Neogen Ionics generated ₹19 crore in revenue, against ₹5 crore a year earlier.
Battery chemicals are the next big growth driver. Management expects the business to generate about ₹300 crore in FY27 revenue, comprising around ₹200 crore from electrolyte salts and ₹100 crore from electrolytes, largely in the second half. Four international customers have given provisional approval for the salts.
The expansion, however, requires substantial investment. The battery materials projects have a total cost of ₹1,795 crore, of which ₹218 crore was spent in Q1FY27. Neogen has also raised its FY27 standalone revenue guidance to ₹950-1,050 crore from ₹875-950 crore and is targeting an EBITDA margin of 18-20% in FY28.
Lithium prices and the pace of capacity utilisation remain uncertain. Management has therefore refrained from providing EBITDA guidance for the battery chemicals business.
Neogen combines an established specialty chemicals business with a sizeable battery materials opportunity. Strong current earnings are encouraging, but execution, capital costs and the ramp-up of new plants will determine how much the new business contributes to future growth.
Aditya Infotech is a leading Indian video surveillance company that sells security products under the CP PLUS brand, which contributes about 87% of total revenue. Its portfolio includes CCTV cameras and other surveillance solutions.
The company is shifting towards higher-value products, with IP products accounting for nearly 79% of the CP PLUS portfolio. These include connected and AI-enabled cameras. It has manufacturing capacity of 2.5 million units a month and holds more than 40% of India's video surveillance market.
DII holding rose to 15.80% in the September quarter from 13.61% in June, an increase of 2.19 percentage points.
Aditya Infotech reported a sharp improvement in Q1FY27. Revenue grew 89.5% YoY to ₹1,402 crore, while gross margin expanded 810 bps to 30.8%. Ebitda jumped 220% to ₹208 crore, lifting the Ebitda margin by 604 bps to 14.8%.
Adjusted net profit rose 332.5% to ₹142 crore, translating into a profit margin of 10.1%. Lower finance costs supported earnings, while price increases of 10-20% across categories helped pass on higher input costs.
The focus now shifts to sustaining growth and margins. Management has retained its FY27 revenue guidance of ₹6,000-6,500 crore, against ₹4,220 crore in FY26. It targets an Ebitda margin of 14-15% and an adjusted net profit margin of 8.5-9.5%. The business typically sees stronger demand in the second half of the financial year.
Enterprise and government customers are expected to drive the next phase of growth through the CP PLUS Pro series. The company is also expanding into areas such as machine vision, with greater local manufacturing expected to support the push.
A strong brand, improving margins and an expanding product portfolio underpin Aditya Infotech's growth story. However, its ability to sustain profitability will depend on input costs and whether further price increases can be passed on to customers.
For more details, see the Aditya Infotech company fact sheet and quarterly results.
Conclusion
The September quarter suggests that DIIs are being selective rather than spreading their investments across the market. The four companies operate in different industries, but each has reported strong recent growth and identified drivers for further expansion.
Rising institutional ownership can indicate growing investor interest, but it is not an investment signal on its own. In Spectrum's case, the increase appears to be substantially linked to a preferential issue, highlighting why changes in shareholding need to be examined in context.
Business quality, financial performance, management execution and valuation remain central to any investment decision.
Happy investing.
This article is syndicated from Equitymaster.com.