Bernstein shuffles India portfolio as Q1 earnings offer stock-specific bets

Bernstein has, however, held on to some of the stocks in its earlier focus list - Larsen & Toubro (L&T), NTPC Axis Bank, HDFC Bank, Nuvama and HomeFirst.

Bernstein has shuffled its India portfolio as the June quarter (Q1-FY27) results season draws to a close. Besides adding Eternal, which it believes, continues to demonstrate competitive strengths in a sector where raising capital is becoming increasingly difficult, the global research and broking house has added Paytm on the back of potential MDR-related catalysts. Adani Ports also found a place in Bernstein’s India model portfolio.

 

Avenue Supermarts was dropped following its recent outperformance at the bourses and growing risks to urban growth from quick commerce. The portfolio, Bernstein said, is somewhat financials-heavy, not by design, but as a reflection of their coverage universe and bottom-up conviction. 

 

 

“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 per cent for 4 months in a row now. Moreover, the threat from quick-commerce is always a looming factor,” wrote analysts at Bernstein led by Venugopal Garre, their managing director, in a recent coauthored note. 

 

 

That said, Bernstein has held on to some of the stocks in its earlier focus list – Larsen & Toubro (L&T), NTPC Axis Bank, HDFC Bank, Nuvama and HomeFirst. CLICK HERE FOR THE FULL PORTFOLIO

 

“Mahindra & Mahindra (M&M) stays in autos – with good Q1-FY27 numbers and expectations to do better even if overall demand is expected to be slow. Zydus remains our healthcare pick, driven by its innovation led portfolio especially in US business, and differentiated products in India,” Garre wrote.

 

Corporate earnings

 

Corporate earnings for the broader market, Bernstein said, are not yet seeing upgrades as 'base effect' turns less favorable and the macro backdrop remains volatile. 

 

Even with a not-so-compelling overall set-up, the market, the note said, remains quite interesting beneath the surface, with stock-specific opportunities continuing to offer the best route to outperform in what’s likely to be a modest-returns environment. Bernstein has a Nifty target of 26,000, up nearly 8 per cent from the current levels. 

 

Q1-FY27 earnings for the NSE200, Bernstein said, reflected a moderation in momentum, with growth easing to 8 per cent from 12.5 per cent in the March quarter. Beneath the headline, however, the picture was far more mixed. Nifty 50 companies, it suggests, saw earnings growth accelerate sharply from near-flat levels last quarter to 12.8 per cent, while stocks ranked 101st to 200th within the NSE200 delivered a more modest 8 per cent growth. 

 

The biggest disappointment, according to Bernstein, was the Nifty Next 50, where earnings declined nearly 4 per cent, dragged down by losses at oil marketing companies (OMCs) and weakness across a handful of banking and cement names.

 

"Ex-OMCs NSE 200 growth would have been 19 per cent in the June quarter on a low base and if we exclude Metals as well growth would have been 15 per cent. With NSE 200 growth expectations at 13 per cent and base effects being tougher from September 2026 - there’s limited room for earnings upgrades, posing a challenge," Garre said.