Bernstein rejigs India portfolio; adds HDFC Bank, PB Fintech; exits Infosys

This latest revision, it said, was shaped by several factors, which meant increasing exposure to the financials and consumer sectors, booking gains in stocks where the market drivers are in place

Global research and broking house Bernstein has revamped its India stock portfolio after six months, with 6 exits and addition of 5 new scrips. The India-focused portfolio, Bernstein said, has delivered a 9.8 per cent return versus 8.5 per cent for the Nifty during this period. 

 

This latest revision, it said, was shaped by several factors, which meant increasing exposure to the financials and consumer sectors, booking gains in stocks where the market drivers are now well understood and there are no significant new catalysts. New stocks were added that exhibit strong underlying growth, fit their sector themes, and may have lagged market performance year-to-date, Bernstein said. Some stock removals, it highlights, have even resulted from changes in coverage. 

 

 

At a macro level, the range of variables shaping market prospects, Bernstein said, is widening, with many proving difficult to forecast. India’s evolving global alignments, the trajectory of domestic manufacturing, and the implications of disruption trigged by artificial intelligence (AI), wrote Venugopal Garre, managing director and India head of research at Bernstein in a recent coauthored note, is set against a volatile global macro backdrop, which is likely to be decisive for the long-term.  

Portfolio

 

“Amid this complexity, we keep our portfolio construct deliberately simple: 11 stocks, tilted toward sectors we see as preferred exposures. We continue to lean towards consumption over capital expenditure, alongside opportunities to participate in the potential re-leveraging cycle. External-facing sectors remain challenged by policy volatility and are not our preferred allocations for now,” Garre wrote.

 

That said, Bernstein notes a degree of renewed interest in the information technology (IT) sector, supported by more reasonable valuations, a backdrop of earnings disappointments that has lowered expectation risk, and the potential demand uplift from US monetary easing.  

 

“However, given the possibility of unforeseen risks in an unfavorable US–India policy environment, both IT and Healthcare remain rated Neutral,” Garre added.

 

Bernstein’s overweight positions are concentrated in financials, telecom, and select areas within consumption, where visibility of earnings and structural tailwinds remain firm. Industrial is rated Underweight due to risks to government capital formation momentum, while Utilities remain Neutral, though they remain selectively bullish on stocks within the sector.