Jefferies India favors Coal India, Honasa in portfolio reshuffle

Jefferies India has adjusted its model portfolio, now favoring stocks such as Coal India (NS:), Honasa Consumer (NS:), Eicher Motors (NS:), NTPC (NS:), HDFC Bank (NS:), and ICICI Prudential Life. This move comes as the 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 (NS:)’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 (NS:) because of its high-end consumer base stability amid inflationary pressures.
  • A reduction in positions in Bajaj Finance (NS:) 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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