Mutual fund managers are becoming more discerning when it comes to choosing stocks in the mid-cap and small-cap space. This shift in strategy is driven by concerns over valuations in these segments. In January, mutual fund managers focused on the pharmaceutical sector, making selective purchases. Additionally, they made adjustments to their holdings in the banking and financial services industry (BFSI) space due to the decline in share prices of private lenders. Key stocks that were preferred by mutual fund managers in January include IndusInd Bank, Bank of India, Divi’s Laboratories, GlaxoSmithKline Pharmaceuticals, Aditya Birla Capital, Unichem Laboratories, and Ipca Laboratories.