Stories
Jefferies Favours Largecaps and Sees Value in Banks, NBFCs, and Real Estate
- •Jefferies recommends shifting portfolios towards largecap stocks, citing better risk-reward opportunities and attractive valuations compared to broader markets.
- •Key favoured sectors include largecap banks, non-banking financial companies, oil and gas, and selected real estate stocks.
- •Despite foreign institutional investor selling and potential RBI rate hikes, strong domestic economic indicators and corporate earnings are expected to support the market.
- •Listed real estate companies are projected to deliver decent 12-month returns as developers continue gaining market share despite higher borrowing costs.
- •Recent market corrections in the hospital and healthcare sector have created attractive buying opportunities for long-term investors eyeing structural growth.
Key Questions Answered
Jefferies has shifted its portfolio recommendations toward large-cap banks, non-banking financial companies (NBFCs), oil and gas companies, and selected real estate stocks. The brokerage believes these sectors offer a better risk-reward opportunity and are well-placed to deliver returns over the next 12 months as valuations have become more attractive.
Jefferies expects the Reserve Bank of India (RBI) to continue raising interest rates following a hawkish shift in its policy stance. The brokerage anticipates another 50 basis points of rate hikes, though the final outcome will largely depend on the US Federal Reserve's policy path.
Despite expectations of higher interest rates and borrowing costs, Jefferies remains constructive on listed real estate companies because listed developers continue to gain market share even if the broader property market slows. Additionally, recent market corrections have improved valuations, supporting a positive 12-month outlook for operational performance and returns.
