Jefferies’ global head of equity strategy wrote in his latest GREED & fear note that the investment in Home First Finance will be removed and replaced by an investment in Adani Power. In the travel space, he added that the investment in Le Travenues Technology (Ixigo) will also be removed and replaced by an investment in InterGlobe Aviation (IndiGo), while the investment in Lemon Tree Hotels will be replaced by an investment in Indian Hotels.
The rejig comes against the backdrop of a sharp relative underperformance of Indian equities versus emerging-market peers, even as the domestic market has largely moved sideways in local-currency terms.
Wood pointed out that “MSCI India has underperformed the MSCI Emerging Markets Index by 41% on a total-return basis since reaching a peak almost coinciding with the day of Jefferies’ 3rd India Forum in September 2024, even though the index has been flat in rupee terms since then, though down 8% in US dollar terms.”
Despite this, he is sticking with an India-overweight stance within emerging markets, arguing that the story remains one of relative opportunity, helped by policy reforms, AI-led investment plans and strong domestic capital formation. “Still the key point remains relative rather than absolute,” he wrote, noting ongoing reform momentum under the Modi government and robust domestic savings flows.
The updated model portfolio, benchmarked to MSCI India and designed “to increase in value” over a one-year horizon, now carries a 4% allocation each to Adani Power and IndiGo.
In the financials-heavy construct, Jefferies continues to own ICICI Bank, HDFC Bank and State Bank of India at 4% each, alongside SBI Life and REC, while in industrials and consumption it holds ABB India, Bharti Airtel, Zomato (Eternal), TVS Motor, Mahindra & Mahindra and Ambuja Cements.Also read: Global funds make $2.1 billion comeback on D-Street as earnings outlook improves
Wood’s latest changes also include a 1 percentage point increase in ABB India, funded by trimming PolicyBazaar, underscoring his continued preference for India’s industrial and capital-expenditure themes.
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