The rejig
As the Indian stock market is facing pressure from rising bond yields, global investment bank Jefferies sees an opportunity emerging beneath the broader market weakness in largecap stocks, where valuations have fallen below historical averages and the earnings gap with midcaps is expected to narrow.
Reliance Industries
Jefferies increased weight in the company and said Reliance has been added at an attractive valuation. The stock is trading at 8.4 times one-year forward EV-to-EBITDA, around 23% below its 10-year average. The brokerage also sees scope for upgrades if refining margins improve.
Kotak Mahindra Bank
Jefferies cited the removal of leadership overhang, potential acceleration in growth from current levels of 15%+ and an attractive valuation. The stock trades at 1.8x FY27E price-to-adjusted book value (P/ABV), around 50% below its 10-year average.
Welspun Corp
Jefferies has also added Welspun Corp, which it expects to benefit from a multi-year upcycle in oil and gas infrastructure spending across the US and Middle East, supported by local manufacturing. The brokerage expects this to drive EBITDA and EPS compound annual growth of more than 30% over FY26-29E.
Eicher Motors
The Wall Street investment bank has trimmed weight in the two-wheeler major. Eicher shares have slipped over 8% in the last one month and remain 5% lower since the beginning of the year.
Lodha Developers
The brokerage has trimmed the weight in the real estate company. The weight reduction comes after a sharp 60% rally in the last six months. However, in the last one month, the stock is down over 5%.
Godrej Properties
The real estate giant has also seen a cut in weight by Jefferies. The stock is down over 20% since the beginning of the year and about 32% in the last five years.
Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.
