Jefferies' Chris Wood reshuffles India Portfolio: 3 new stocks added...
Jefferies' Global Head of Equity Strategy, Christopher Wood, has raised concerns about valuations in India, particularly in midcaps. This comes in the backdrop of the Reserve Bank of India easing interest rates and boosting liquidity in the market. As a response to these market dynamics, Wood has made significant changes to his long-only India portfolio.
Key Changes in the Portfolio
According to the latest GREED & fear report, Wood has added 3 new stocks to his portfolio and increased the weightage of 2 existing stocks by 1% each. The new additions include TVS Motor, Home First Finance, and Manappuram Finance, each receiving a 4% point allocation. Additionally, Policybazaar and Airtel have each gained an extra 1 percentage point.
Policybazaar has also been included in the Asia ex-Japan portfolio, replacing L&T. On the other hand, Wood has decided to remove three key stocks from his India long-only portfolio due to valuation concerns and changing sector preferences.
Outlook on Real Estate
Despite removing Godrej Properties from the portfolio, Wood still holds a positive outlook on the Indian real estate sector. The GREED & fear report highlights that the sector is in its fifth year of an upcycle, with significant growth potential, especially in the mid-income and affordable housing segments.
According to Jefferies India property analyst Abhinav Sinha, the top 7 developers are projected to grow pre-sales by 22% YoY in FY26, indicating a promising future for the sector.
Impact of Monetary Policy
One of the driving factors behind Wood's portfolio reshuffle is India's monetary policy pivot. The unexpected rate cuts by the RBI have influenced investment decisions and market dynamics. Jefferies' India research head, Mahesh Nandurkar, suggests the possibility of further rate cuts in the future.
The note also discusses broader market themes and the impact of geopolitical events, such as the Middle East conflict, on global markets.
Investment Trends
In May, private equity and venture capital deals in India witnessed a decline, attributed to geopolitical tensions and cautious investor sentiment. However, the startup sector experienced a 21% increase in investments, particularly in logistics and fintech.
