Adani Ports out, REC in: How Bernstein has tweaked its portfolio
Fed rate cut and the US presidential election, global brokerage firm Bernstein has booked profits in Adani Ports, Bharti Airtel and Axis Bank while maintaining large, stable stocks such as REC, SBI Life and D-Mart in its India Model Portfolio’s August update.
This year, unexpected election outcomes partly materialized, and concerns about a recession also surfaced, though only to some extent and the markets experienced significant downturns at regular intervals, but thanks to strong domestic institutional investor (DII) inflows and robust retail participation, the Nifty benchmark index has risen by 15% year-to-date.
“This is a phase to look out for select narrow pockets of relatively moderate valuations, strongly supportive themes that drive a rerating, or non-linearity drivers among stocks. Broad returns can continue for some time, but the disparity within stocks is likely to increase as many fundamental challenges finally start to unravel,” said Bernstein in its report.
A summary of Bernstein’s ideas is given below:
Additions
- REC Ltd: The global brokerage firm believes that it is time to add lenders in this segment, as they tend to benefit from all four power themes: rising demand, evening power shortage, transmission constraints, and the renewable shift. Power lenders are characterised by higher ROEs, better NPA stats, and a cycle benefiting them as one moves from power surplus to power shortage phase, fueling new growth and de-distressing thermal plants which had taken loans from REC. Specialised lenders are
