Piper Serica exits CDSL, CAMS shares; adds Gland Pharma, Astra Microwave

Piper Serica's leadership portfolio has added Gland Pharma Ltd and Astra Microwave Products Ltd in the June quarter, while exiting capital-market infrastructure plays Central Depository Services (India) Ltd (CDSL) and Computer Age Management Services Ltd (CAMS), according to founder and fund manager Abhay Agarwal.

Speaking to Business Today on Wednesday, Agarwal said the portfolio follows a growth-investing strategy focused on emerging sectors and companies that can become leaders in their respective industries.

Agarwal said the portfolio's focus over the past one to one-and-a-half years has been primarily on electronic manufacturing services (EMS) and pharmaceuticals.

On Gland Pharma, Agarwal said the company was added after what he described as a multi-year post-IPO price and time correction. He expects the company to grow 15-20 per cent annually over the next four to five years and said the stock remains fairly valued in the fund's assessment.

The second addition, Astra Microwave Products, has been tracked by the fund for a long time. Agarwal pointed to the company's order-book growth and execution capabilities, particularly in radar systems, as key factors behind the investment.

Piper Serica does not disclose individual model-portfolio weightages, but Agarwal said its portfolio management framework generally keeps individual stock allocations between 5 per cent and 10 per cent.

The additions were accompanied by exits from CDSL and CAMS, both of which had been held for around five years. Agarwal said the two companies had delivered strong returns, but the fund saw relatively better opportunities elsewhere. He added that the growth rate of capital-market infrastructure companies may not be as high going forward as it had been in the period following the Covid-19 pandemic.

Agarwal also highlighted a strong preference for pharmaceutical companies focused on innovation, research and development, complex formulations and advanced markets such as the US and Europe. He said the portfolio avoids relying on the generics business and is looking for companies with product pipelines and reinvestment-led growth.

The fund manager said Piper Serica has also remained underweight on large private banks and has had no exposure to IT services for the past three years.

Agarwal noted that around 75 per cent of the model portfolio comprises small-cap stocks, reflecting the fund's strategy of identifying companies earlier in their growth trajectory.