Kotak Institutional Equities has made several changes to its large cap and midcap model portfolios. The brokerage has cut exposure to some stocks after sharp rallies, while increasing allocations to select financial, infrastructure and consumer-facing names.
What has changed and which stocks are gaining weight? Let’s take a look at their investment rationale-
Kotak Institutional Equities: Key changes in the model portfolio?
According to the Kotak report, the sharp recovery in stock prices from the March-April 2026 lows has reduced the number of attractive opportunities.
Kotak said, “the sharp increase in prices of stocks from the March/April 2026 trough in most sectors” has further reduced its investment opportunity set.
The brokerage continues to favour two broad themes – domestic discretionary services and domestic manufacturing.
Financials remain a major preference. Kotak believes banks and insurance companies are trading at attractive valuations despite near-term challenges. It also sees opportunities in capital markets and diversified financial companies, although valuations in these segments are already high.
Kotak large cap portfolio: TCS, real estate stocks exit
One of the biggest changes is the removal of Tata Consultancy Services (TCS) from the large cap model portfolio.
Kotak has removed TCS, which had a 1.8% weight, after the stock gained 19% since early July. The brokerage remains cautious on information technology services because of weak customer spending and longer-term disruption from artificial intelligence.
Kotak said the sector has become “the antithesis of AI theme in the short term.”
Two real estate stocks, DLF and Lodha Developers, have also been removed. Together, they had a 2.8% portfolio weight.
The brokerage pointed to concerns around stagnant industry volumes and affordability. However, it remains positive about India’s long-term residential real estate opportunity.
The stocks had already delivered strong gains. DLF rose 32%, while Lodha jumped 84% from the March-April market lows.
Where is the money moving?
The 4.6% weight freed up by the exits is being redistributed across six stocks.
| Stock | Change in model portfolio |
| Adani Ports and Special Economic Zone | 0.015 |
| Eternal | 0.005 |
| GMR Airports | 0.005 |
| HDFC Life Insurance | 0.01 |
| Hindalco Industries | 0.005 |
| Shriram Housing Finance | 0.006 |
Kotak has increased its allocation to Adani Ports and Special Economic Zone by 1.5%. The stock had fallen 10% from its recent peak amid market concerns around a reported acquisition in the United Kingdom.
HDFC Life Insurance has also received a 1% allocation increase. According to Kotak, the stock’s valuation already reflects investors’ regulatory concerns.
Kotak Midcap portfolio gets a new name
The most notable mid-cap change is the addition of Kalpataru Projects International.
Kotak sees the stock’s valuation as attractive at 14.5 times one-year forward earnings per share. The brokerage expects earnings per share to grow 30% in FY27 and 24% in FY28.
The key driver is its strong order book and exposure to transmission as well as buildings and factories.
Kotak said these segments should benefit from “India’s thrust on electrification and domestic manufacturing.”
On the other side, 360 ONE has been removed after its share price rose 7.4% over the past month.
Kotak’s outlook for rest of FY27
Kotak Institutional Equities pointed out that “the sharp increase in prices of stocks from the March/April 2026 trough in most sectors” that feature in their medium-term themes “has further shrunk the investment opportunity set.”
The key themes include domestic discretionary services (financials, healthcare services, hospitality and retailing) and domestic manufacturing (aerospace & defence, capital goods, CDMO, industrials).
They expect net profit of the Nifty to grow 18% in FY27 and 14% in FY28 following on the 8% growth in FY26.
Disclaimer: This article is based on research reports from one or more brokerage firms and is for informational purposes only. The views, target prices, and recommendations expressed are those of the respective brokerage firms and do not reflect the official policy or position of Financial Express. This should not be construed as an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor before making any investment decisions.