Which sectors did mutual funds prefer in April 2025?

WHICH SECTORS DID MUTUAL FUNDS PREFER IN APRIL 2025?

Which were the most preferred sectors for mutual  funds in April 2025? A one month perspective gives a very short term picture. However, we will first look at sectors that attracted maximum MF funds in April 2025. In absolute terms, Banking, Oil, automobiles, telecom, and pharma were the most preferred sectors. In terms of percentage change; diamonds, agriculture, oil & gas, alcohol, and realty were the most preferred sectors.

There is another interesting perspective. Here we look at equities overall (including equity holdings in hybrid and passive funds). As of April 2025, active equity AUM stood at ₹30.58 Trillion. However, overall equity holdings of Indian MFs was much bigger at ₹42.64 Trillion. That means ₹12.06 Trillion (28.3%) of MF equity holdings was accounted for by hybrid and index funds. It is this total equity holding of ₹42.64 Trillion that we will use for our analysis.

SECTORS WHERE MF EXPOSURE WAS ABOVE ₹1 TRILLION

The overall equity AUM of all mutual funds stood at ₹42.64 Trillion in April 2025; compared to ₹41.11 Trillion in March, and ₹38.24 Trillion in February 2025. This AUM is 22.2% higher than the AUM of ₹34.89 Trillion in the year ago period.

Sectors	April 2024	January 2025	March 2025	April 2025
Banking & Finance	10,07,483	11,39,322	12,05,703	12,71,924
IT-Services	2,97,918	4,28,239	3,83,320	3,81,657
Auto & Auto Ancillaries	3,22,490	3,78,686	3,60,040	3,73,062
Pharmaceuticals	2,78,900	3,49,728	3,57,046	3,65,405
Oil & Gas	2,31,643	2,38,635	2,44,668	2,64,437
FMCG	1,72,989	2,12,598	2,06,629	2,13,290
Telecom	1,01,746	1,29,485	1,33,072	1,41,765
Capital Goods	1,33,141	1,45,013	1,41,259	1,41,758
Retail	85,275	1,24,654	1,27,710	1,34,505
Power	1,14,380	1,20,117	1,27,678	1,30,270
Metals & Mining	1,22,799	1,25,174	1,32,945	1,28,787
Chemicals & Fertilisers	91,912	1,10,500	1,12,265	1,19,726
Infrastructure	1,14,352	1,26,097	1,21,139	1,17,454

Data Source: AMFI, MF Websites (₹ in Crore)

These top 13 sectors account for 88.7% of total equity AUM of Indian mutual funds. There is not much of a surprise in the list, with financials and IT leading the market cap rankings. If you compare with the year ago period, there are some sectors that have seen a sharp spike like Aviation, Retail, Agriculture, Telecom. Pharmaceuticals, Chemicals & Fertilizers, IT Services, and Banking. Which are the sectors to have lost value compared to January 2025? Paper, plastics, abrasives, IT Services, Media, infrastructure, and textiles have lost MF AUM value compared to the quarter-ago period.

SECTORS WITH THE BEST YOY AUM ACCRETION

Let us first focus on the size effect and look at the sectors that showed the best AUM accretion yoy in terms of absolute change in Rupee AUM.

Sectors	April 2024	April 2025	AUM Change	(% Change)
Banking & Finance	10,07,483	12,71,924	2,64,441	26.25%
Pharmaceuticals	2,78,900	3,65,405	86,505	31.02%
IT-Services	2,97,918	3,81,657	83,739	28.11%
Auto & Auto Ancillaries	3,22,490	3,73,062	50,572	15.68%
Retail	85,275	1,34,505	49,230	57.73%
FMCG	1,72,989	2,13,290	40,301	23.30%
Telecom	1,01,746	1,41,765	40,019	39.33%
Oil & Gas	2,31,643	2,64,437	32,794	14.16%
Chemicals & Fertilisers	91,912	1,19,726	27,814	30.26%
Power	1,14,380	1,30,270	15,890	13.89%
Construction Materials	77,466	93,289	15,823	20.43%
Consumer Durables	70,193	85,356	15,163	21.60%
Aviation	18,118	29,111	10,993	60.67%
Capital Goods	1,33,141	1,41,758	8,617	6.47%
Alcohol	21,905	29,702	7,797	35.59%

Data Source: AMFI, MF Websites (₹ in Crore)

Here we look at the sectors that showed the best AUM accretion in rupee terms. This shows actual AUM value created, but it can be biased in favour of large sectors. Here are some quick findings. The biggest value creation was obviously in banking, but the second best AUM accretion was pharma, which is surprising as it is not among heavyweight sectors. Retail, telecom, and chemicals & fertilizers are the other 3 sectors that are not heavyweight sectors, but still have shown solid AUM growth traction. While retail was driven by digital retail stories, telecom was driven by Bharti Airtel. In the case of chemicals, it was more on the hope of revival in demand for specialty chemicals; both globally and domestically.

SECTORS WITH BEST PERCENTAGE AUM ACCRETION

The absolute change is vulnerable to the base effect. To be fair, we also look at the percentage change in AUM on a yoy basis.

Sectors	April 2024	April 2025	AUM Change	(% Change)
Aviation	18,118	29,111	10,993	60.67%
Retail	85,275	1,34,505	49,230	57.73%
Agri	12,332	18,124	5,792	46.97%
Telecom	1,01,746	1,41,765	40,019	39.33%
Alcohol	21,905	29,702	7,797	35.59%
Pharmaceuticals	2,78,900	3,65,405	86,505	31.02%
Diversified	14,653	19,091	4,438	30.29%
Chemicals & Fertilisers	91,912	1,19,726	27,814	30.26%
IT-Services	2,97,918	3,81,657	83,739	28.11%
Banking & Finance	10,07,483	12,71,924	2,64,441	26.25%
FMCG	1,72,989	2,13,290	40,301	23.30%
Others	26,997	33,273	6,276	23.25%
Diamond  &  Jewellery	21,694	26,621	4,927	22.71%
Consumer Durables	70,193	85,356	15,163	21.60%
Textiles	23,383	28,366	4,983	21.31%

Data Source: AMFI, MF Websites (₹ in Crore)

This list has throw up some interesting names. Aviation is right there at the top, thanks to the relentless rally in Indigo Airways as it has consolidated its market share. Retail is one sector that has shown traction in absolute and in relative terms. Telecom, Pharma, and chemicals & fertilizers again find themselves in the percentage accretion list also.

Despite the correction post December 2024, the recovery in late March and April has been sharp. The market has absorbed the shocks of tariff uncertainty and the brief Indo-Pak war and has come out stronger. While banking continues to lead by sheer size, the real growth traction is in sectors like pharmaceuticals, chemicals, telecom, and the convergence of digital and retail. These could be the sectors to watch out for.