Introduction

I’ve been tracking stocks for a while now. We all know how mutual funds and foreign investors shape our markets. 

Today, let’s look at what draws these big players to certain companies. 

We’ll use Mankind Pharma as an example of a winner. And Eveready Industries as one they often pass on. 

I’ll break down my logic step by step. I’ll base my analysis on key data that actually effects the investment decision of the institutional investors.

1. A Quick Comparison Table

First, let’s lay out the key differences in a simple table. 

This shows why institutions might back Mankind Pharma but avoid Eveready Industries.

This table isn’t everything. But it highlights the core logic. Now, let’s dive deeper.

2. The Appeal of Stability in Big Names

Think about it. Institutional investors handle billions. They can’t risk it all on shaky bets. 

That’s why they lean towards companies like Mankind Pharma. It’s a mid-cap giant in pharma. 

Market cap sits at over Rs.1 lakh crore. That size means less wild swings. Funds like pension schemes love that.

Mankind has been growing fast. In FY25, revenue hit Rs.12,925 crore. That’s up nicely from before. Q1 FY26 showed 23.4% growth year-on-year. Why? 

Strong brands and distribution. They focus on generics and consumer health. 

Things like painkillers and vitamins sell steadily. Even in tough times, people need meds.

3. Strong Fundamentals Draw the Crowd

Numbers tell the story. 

Mankind’s profit margin is 14.66%. Net profit for FY25 was Rs.1,913 crore. Debt is there – Rs.8,480 crore as of March 2025. But cash flows cover it well. Even at a debt load of Rs.8,480 crores, its Interest coverage ratio is 8.26. Moreover, the debt/EBITDA ratio of the company is a healthy 2.39 (read more about debt/EBITDA ratio here).

Institutions see this as sustainable. BlackRock and Vanguard hold chunks. FIIs upped stakes by 1.7% recently. 

Mutual funds bought in July 2025 too.

What pulls them? Growth pipeline. 

Mankind invests in new areas like biotech. Their BSV unit expects 18-20% revenue jump. 

EBITDA margins at 26-28%. It’s not just sales. It’s profitable growth. 

In India, pharma exports are booming. Mankind rides that wave.

4. Why Skip the Smaller Players?

Now, let’s talk about Eveready Industries. 

It’s in batteries and lighting. 

Market cap is just Rs.3,008 crore. Small caps like this are risky (for institutional players). 

They do not want to own such stocks whose prices can drop fast on bad news. Institutions prefer to avoid that headache.

Moreover, its revenue growth is also slow. FY25 brought Rs.1,345 crore – only 2.3% up. 

Q1 FY26 sales at Rs.374 crore, 7% growth. Not bad, but not exciting either for the large players. For such growth rate number, why the institutional players would take the risk with small caps.  

With a profit margin of 6.09% and PAT Rs.82.4 crore, a balance sheet with Rs.288 crore debt at a debt-to-equity 0.63 is makes it too risky.

On a small firm like Eveready those numbers look like a burden. 

How institutional players see it? If costs rise, like raw materials, their margins will dip further. 

Low growth, high debt, and low margins can make institutional investors disinterested almost instantly.

5. Low Interest from Big Funds

Holdings say it all. 

Institutions own just 7.45%. Tata Asset has 2.44%. Not much else. Why? 

• Sector issues. Batteries face price hikes and competition. Eveready saw cost push recently. Market resisted price increases. Lighting is okay, but not a growth engine.
• Liquidity is low too. Trading volumes aren’t huge. Big investors can’t buy or sell without moving the price. That scares them off. 
• Plus, the current ROE stands at 17.87% for FY2025. It reflects good profitability today. Yet, its 5-year average ROE is negative at -5.18%, highlighting past losses and inconsistent performance. This certainly deters risk-averse institutional investors.

6. Risk vs Reward

Institutional investors prioritize risk management over chasing quick gains. 

Mankind Pharma is a prime pick because it balances reward with lower risk. Its Rs.1,05,966 crore market cap and 23.4% revenue growth in Q1 FY26 show stability and potential. 

The pharma sector is resilient. People always need medicines, and Mankind’s generics and consumer health products tap into steady demand. 

Its 14.66% profit margin and strong cash flows further reduce financial risk. This makes it a safe bet for funds like BlackRock.

Eveready Industries, however, is riskier. 

With a Rs.3,008 crore market cap and 2.3% revenue growth in FY25, it’s less stable. 

It’s diversifying into small appliances, but past losses (negative ROE averaging -5.18% over five years) and high raw material costs linger. Its battery market faces pricing pressure, limiting growth. 

Funds avoid it due to inconsistent profits and low liquidity.

Big investors flock to stocks like Mankind because many hold them, reducing individual risk, if it dips, others stabilize the price. 

Eveready lacks this “herd safety,” leaving investors exposed to volatility.

Conclusion

As retail investors, watching institutional moves can be a fair guide for us.

Domestic Institutional Investors (DIIs), like mutual funds, sometimes outpace Foreign Portfolio Investors (FPIs) in market holdings, with DIIs owning 17.1% of NSE shares in Q1 FY26. 

Their logic, focusing on fundamentals like revenue growth, low debt, and sector strength, helps spot solid bets. 

Mankind Pharma’s consistent performance and pharma sector tailwinds make it a long-term favorite for institutions. 

Eveready Industries, despite diversification efforts, faces skepticism due to its smaller scale and past volatility. 

What small investors can learn from this? 

• Prioritize companies with clear growth paths and financial stability. But don’t just mimic big funds. Their goals differ from ours. 
• Eveready could recover if it stabilizes profits, but institutions need evidence first.

Have a happy investing