Jefferies India has adjusted its model portfolio, now favoring stocks such as Coal India, Honasa Consumer, Eicher Motors, NTPC, HDFC Bank, and ICICI Prudential (LON:PRU) Life. This move comes as the Nifty sustains a robust one-year forward P/E ratio of 18.8x and maintains a 63% premium over other Emerging Markets.
The brokerage's strategy indicates easing macroeconomic concerns, highlighted by a 60 basis point drop in US yields and stable oil prices despite Middle East tensions. The potential for a market rally is also on the horizon, hinging on favorable election outcomes for the BJP after December 3.
Key changes in the portfolio include:
- Eicher Motors taking Maruti's spot due to its resilience against new competitors like Harley and Triumph.
- NTPC replacing PowerGrid owing to stronger EPS growth forecasts from renewable energy projects.
- Honasa Consumer being preferred over Marico because of its high-end consumer base stability amid inflationary pressures.
- A reduction in positions in Bajaj Finance and Chola following the RBI’s recent policy moves, which suggest that rate cuts may be delayed, impacting non-banking financial companies (NBFCs).
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