Jefferies’ Chris Wood has reduced holding in heavyweights HDFC Bank and Reliance Industries (RIL) while betting on Bharti Airtel.
In the GREED & Fear report, Wood said changes would be made in both the India long-only and global long-only portfolios. An investment in Bharti Airtel will be introduced in the India long-only portfolio with a 3% weighting. This will be paid for by shaving the investment in RIL by three percentage points.
The investment in HDFC Bank will also be reduced by two percentage points, while investments in Axis Bank and State Bank of India will be increased by one percentage point each.
As for the global long-only portfolio, the investment in HDFC Bank will be reduced by two percentage points, while the investments in Axis Bank and TSMC (Taiwan Semiconductor Manufacturing Company) would be increased by one percentage point each.
Wood highlighted the central government’s interim Budget, which was “almost devoid of vote-buying populism” — a pleasant surprise according to him. “This is testament to the confidence of Prime Minister Narendra Modi ahead of the elections,” the report said.
Jefferies’ head of India research, Mahesh Nandurkar, had highlighted in an earlier report that the government capex was now budgeted to increase by 17% in FY25, following an estimated 28% growth this year, while the fiscal deficit is projected to decline from 5.8% of GDP this fiscal year to 5.1% in FY25, compared to market expectations of 5.3%.
Further, the finance minister also mentioned that the FY26 fiscal deficit target was below 4.5%. As a result, Nandurkar has increased the investment in Larsen & Toubro in his portfolio.