Jefferies Rejigs India Bets: Hikes Reliance, Adds Kotak & Welspun
Global brokerage Jefferies has executed a decisive reallocation across its India model portfolio, shifting capital exposure toward established large-cap bellwethers while systematically trimming holdings in interest-rate-sensitive counters. The brokerage noted that large-cap equities currently present a far superior risk-reward profile relative to mid-cap peers, where extended valuations have outpaced underlying fundamentals. With the earnings growth differential between large and mid-sized companies narrowing significantly, Jefferies highlighted that frontline market leaders offer stronger downside protection and compelling relative valuations for long-term institutional and retail investors navigating macro volatility.
Reliance Industries Takes Center Stage: Weightage Hiked to 7.5% on Deep Valuation Discount
The cornerstone of the portfolio rejig is an aggressive ramp-up in oil-to-retail conglomerate Reliance Industries Limited (RIL), whose portfolio weighting has been elevated to 7.5%. Jefferies grounded this high-conviction stance on RIL's steep valuation discount and robust earnings recovery potential. The stock is currently trading at an attractive 8.4 times its one-year forward estimated enterprise value to operating profit (EV/EBITDA)—a valuation multiple that sits 23% below its historical 10-year average. Beyond multiple expansion, the brokerage anticipates upward revisions in earnings estimates, fueled primarily by a sustained rebound in Gross Refining Margins (GRMs), which is poised to drive healthy cash flow acceleration across the company's downstream refining and petrochemical operations.
Fresh Entries: Kotak Mahindra Bank and Welspun Corp Enter the Fray
Alongside its concentrated bet on Reliance, Jefferies made two targeted inclusions to balance defensive banking stability with capital goods momentum. Private sector lender Kotak Mahindra Bank has been inducted into the model portfolio with an initial 2% allocation, reflecting confidence in the bank’s resilient liability franchise, balance sheet discipline, and upside potential as sector-wide credit growth normalizes. Concurrently, pipe manufacturer and infrastructure solutions provider Welspun Corp secured a 2.4% weighting in the framework, supported by strong order book visibility across global energy corridors and domestic water distribution networks. These strategic inclusions were funded by trimming exposure to rate-sensitive names, reinforcing a portfolio strategy built around durable operating margins and structural value.
