Bernstein has rejigged its India model portfolio, adding Adani Ports & Special Economic Zone, Eternal and One97 Communications while removing Avenue Supermarts, the operator of DMart. The changes come as the brokerage looks for company-specific triggers at a time when it sees limited room for broad market earnings upgrades and a more difficult macro backdrop.
The three additions come from very different businesses. Adani Ports brings exposure to ports and logistics, Eternal to food delivery and quick commerce, and Paytm to digital payments. Avenue Supermarts, meanwhile, leaves the portfolio, as Bernstein sees no decisive near-term direction and continues to worry about quick-commerce competition.
Bernstein said, “We’re not yet seeing earnings upgrades for the broader market, while base effects turn less favorable and the macro backdrop remains volatile.”
Adani Ports returns as global conditions improve
Adani Ports has returned to Bernstein’s model portfolio after a recent correction in the stock. The brokerage said the improving global environment and the company’s operating strengths support the move.
Bernstein said, “Adani Ports marks a re-entry, given its recent correction and an improving global environment. We see continued room for growth here: with a healthy balance sheet, good pricing power and international business as a key growth driver.”
The brokerage’s argument is built around three factors: balance-sheet strength, pricing power and the international business. It sees these as providing room for continued growth even as the wider market faces a less supportive earnings backdrop.
The return of Adani Ports also shows that Bernstein is willing to revisit a stock after a correction when the underlying business case remains intact. The call is not simply based on recent price movement.
Eternal returns as quick-commerce concerns ease
Eternal, the parent of Zomato, has also entered Bernstein’s model portfolio. The brokerage had previously stayed away from the stock because of concerns over competition in quick commerce and the possibility of a rival listing.
That view has now changed. Bernstein believes Eternal has strengthened its position in quick commerce, while its food delivery business continues to grow.
The brokerage said, “Eternal, a stock we had previously shied away from given the competitive quick-commerce scenario and a potential competitor listing, seems to be shaking off the overhangs and has asserted its dominant positioning in the segment.”
Bernstein added, “At the back of strong numbers (EBITDA and NOV growth ahead of estimates) and solid management commentary, we believe Eternal has emerged as a very strongly positioned QC player to be disrupted easily.”
Food delivery remains another support. Bernstein said, “Moreover, the Food Delivery business continues to show steady growth.”
The addition is notable because the brokerage is not waiting for quick-commerce competition to disappear. Instead, it is taking the view that Eternal has built enough strength in the segment to withstand the competitive pressure.
Paytm enters on potential MDR catalyst
Paytm is the third new addition to the model portfolio. Bernstein sees the stock as a momentum play linked to the possible finalisation of the merchant discount rate, or MDR, in the coming months.
The brokerage said, “Paytm is a momentum play on the likelihood of finalization of the MDR rate in a few months.”
It also believes the existing business is performing well enough to limit the downside if the regulatory catalyst takes longer to arrive.
Bernstein said, “At the core business is doing well which protects the downside risks. Introduction of MDR can lift the net payment margins finally feeding into EPS growth.”
The Paytm call therefore rests on a potential change in payment economics. If MDR is introduced, Bernstein expects the resulting improvement in net payment margins to eventually feed into earnings growth.
That gives Paytm a different type of catalyst from Adani Ports and Eternal. The port operator is being backed on business strength and global conditions, while Eternal is being supported by its competitive position and operating performance.
DMart dropped as quick-commerce threat remains
Avenue Supermarts, the operator of DMart, has been removed from Bernstein’s model portfolio. The brokerage said it does not see a decisive direction for the stock at present and remains concerned about the operating environment.
Bernstein said, “We’re removing DMart from our portfolio where we don’t see a decisive direction as of now – CPI inflation has so far been contained, but sowing has been weak, and WPI has consistently been above 8% for 4 months in a row now. Moreover, the threat from quick commerce is always a looming factor.”
The concern is therefore broader than one quarter of earnings. Bernstein is looking at the combination of weak sowing, elevated wholesale inflation and continued competition from quick commerce.
DMart had entered Bernstein’s portfolio in August 2024. Its removal marks a change in the brokerage’s preference at a time when it wants greater visibility around company-specific earnings drivers.
Earnings growth is becoming harder to find
The portfolio changes come against a market where Bernstein sees a moderation in earnings momentum. NSE 200 earnings growth slowed to 8% from 12.5% in the March quarter, according to the brokerage.
The headline number hides a sharp difference between market segments. Nifty 50 earnings growth accelerated to 12.8% from near-flat levels in the previous quarter, while companies ranked 101st to 200th in the NSE 200 delivered 8% growth.
The Nifty Next 50 was weaker, with earnings declining about 4%. Bernstein attributed the pressure to losses at oil marketing companies and weakness across several banking and cement names.
The brokerage said, “Ex-OMCs NSE 200 growth would have been 19% in the June quarter on a low base and if we exclude Metals as well growth would have been 15%. We do not believe in excluding sectors or stocks simply to present a cleaner growth narrative.”
Bernstein also said the losses at oil marketing companies should be viewed in the wider economic context rather than treated as an isolated problem.
It said, “For macro read, every sector matters. The losses absorbed by OMCs were effectively part of the broader inflation adjustment process.”
Bernstein sees limited room for earnings upgrades
Bernstein expects Nifty 200 clocking earnings growth of 13% but believes tougher base effects from September will make additional upgrades harder.
The brokerage also noted that Nifty valuations have moderated somewhat, while SMID valuations have become richer again. Higher primary-market issuance could add another source of pressure.
Bernstein said, “With NSE 200 growth expectations at 13% and base effects being tougher from Sep – there’s limited room for earnings upgrades, posing a challenge.”
It added, “Nifty valuations have moderated somewhat, but SMID valuations are once again becoming richer. At the same time, primary market issuance is set to accelerate, which could create additional pressure on valuations and cap the extent of returns.”
The brokerage has retained its neutral Nifty target of 26,000. It said, “We’ve maintained our neutral Nifty target of 26,000, indicating modest market returns.”
That view helps explain the latest portfolio changes. Bernstein is not making a strong call on the overall market. It is instead looking for individual companies where a specific business or policy trigger can drive returns.
Three additions, three different catalysts
The latest additions each have a separate reason for entering the portfolio.
Adani Ports is being brought back after a correction, with Bernstein pointing to an improving global environment, pricing power, balance-sheet strength and its international business.
Eternal has been added after earlier concerns around quick-commerce competition eased. Strong operating numbers and its position in the segment have changed Bernstein’s view.
Paytm has a potential regulatory trigger in the form of MDR. The brokerage believes the core business is strong enough to provide some protection while the market waits for greater clarity.
Bernstein said, “Against this backdrop, we are tweaking our portfolio to focus on stocks with visible catalysts, even if some of the additions have performed strongly in recent months.”
That approach is important because the brokerage is not simply favouring stocks that have fallen. Eternal, for instance, has already performed strongly, but Bernstein believes its business position provides enough reason for inclusion.
Bernstein India model portfolio
Bernstein’s refreshed model portfolio contains 13 stocks across industrials, utilities, consumer, financials, healthcare, asset management and automobiles.
| Stock | Sector | CYTD return |
| Adani Ports | Industrials | 13% |
| L&T | Industrials | -2% |
| NTPC | Utilities | 0% |
| Eternal | Consumer | 12% |
| Titan | Consumer | 25% |
| PFC | Financials | 3% |
| Paytm | Financials | 21% |
| Axis Bank | Financials | -3% |
| Zydus Lifesciences | Healthcare | 23% |
| HDFC Bank | Financials | -27% |
| Home First Finance | Financials | 7% |
| Nuvama Wealth | Asset management | 18% |
| M&M | Automobile | -9% |
Source: Bernstein, Bloomberg.
The portfolio remains diversified, with financials forming a sizeable part of the holdings. Consumer, industrial, healthcare and utility names make up the rest.
The performance spread is also wide. Titan, Zydus Lifesciences and Paytm have delivered positive CYTD returns, while HDFC Bank, M&M and L&T have declined. Bernstein has retained both winners and laggards, reinforcing that the portfolio is driven by its view of individual businesses rather than recent stock performance alone.
What the rejig says about Bernstein’s market view
The portfolio changes point to a more selective approach as Bernstein sees the broader earnings picture becoming harder to upgrade.
The brokerage has not changed its neutral Nifty target of 26,000. Instead, it has changed where it wants to take risk within the market.
Bernstein said, “Our portfolio is somewhat financials-heavy, not by design, but as a reflection of our coverage universe and bottom-up conviction.”
The latest rejig therefore leaves the portfolio with three fresh names and one notable exit, but the larger message is about stock selection. With broad earnings upgrades harder to find, Bernstein is looking for businesses where a specific catalyst can change the earnings trajectory rather than relying on the wider market to do the work.
Disclaimer: This article is based solely on Bernstein’s India Strategy report dated August 19, 2026, and the model portfolio information contained in the supplied report. Portfolio additions and deletions, CYTD returns, market data, earnings estimates and valuation metrics are based on the report and sources cited by Bernstein. The information is for reporting purposes only and should not be treated as investment advice or a recommendation to buy or sell any security.