CLSA Revises India Portfolio for 2025, Replaces HDFC Bank with Tata Motors, NTPC and Other Stocks
6th Jan 2025
CLSA's 2025 Market Outlook
CLSA anticipates a challenging year for the Nifty in 2025, driven by an uncertain and risky global macro environment coupled with a near-term economic slowdown in India. The research firm forecasts muted returns for the index due to elevated valuations and underperformance of actual capex spending versus expectations. CLSA sees rising tailwinds for affordable consumption and has adjusted its portfolio accordingly, favouring staples and raising the sector to a significant overweight.
Portfolio Adjustments: Additions and Exclusions
In response to the recent steep market correction, CLSA identified over 30 companies within the NSE 200 index trading more than 20 per cent below their 52-week highs with positive recommendations. The firm has included Tata Motors, NTPC, Nestle, and Britannia in its India focus portfolio while removing HDFC Bank and notably reducing its overweight position in the banking sector.
CLSA included Tata Motors in its portfolio, stating that the stock, after a 35 per cent decline, adequately prices in risks associated with a slowdown in the commercial vehicle and Jaguar Land Rover (JLR) segments. NTPC's recent correction was seen as an opportunity to invest in the power sector and benefit from capacity additions expected in the first half of 2025. To capitalise on low stock expectations, despite changing government actions in favour of affordable consumption, CLSA added Nestlé and Britannia to its portfolio after significant declines in their stock prices.
Portfolio Performance Overview
CLSA acknowledged that while its portfolio managed to outperform the Nifty by 30 basis points in 2024, it underperformed by 4.1 percentage points in the last quarter due to a significant correction in some holdings. Despite this, the portfolio has delivered a return of 186.7 per cent since its inception in January 2021, compared to 77.3 per cent for the Nifty.
CLSA anticipates a challenging year for the Nifty in 2025, driven by an uncertain and risky global macro environment coupled with a near-term economic slowdown in India. The research firm forecasts muted returns for the index due to elevated valuations and underperformance of actual capex spending versus expectations. CLSA sees rising tailwinds for affordable consumption and has adjusted its portfolio accordingly, favouring staples and raising the sector to a significant overweight.
Portfolio Adjustments: Additions and Exclusions
In response to the recent steep market correction, CLSA identified over 30 companies within the NSE 200 index trading more than 20 per cent below their 52-week highs with positive recommendations. The firm has included Tata Motors, NTPC, Nestle, and Britannia in its India focus portfolio while removing HDFC Bank and notably reducing its overweight position in the banking sector.
CLSA included Tata Motors in its portfolio, stating that the stock, after a 35 per cent decline, adequately prices in risks associated with a slowdown in the commercial vehicle and Jaguar Land Rover (JLR) segments. NTPC's recent correction was seen as an opportunity to invest in the power sector and benefit from capacity additions expected in the first half of 2025. To capitalise on low stock expectations, despite changing government actions in favour of affordable consumption, CLSA added Nestlé and Britannia to its portfolio after significant declines in their stock prices.
Portfolio Performance Overview
CLSA acknowledged that while its portfolio managed to outperform the Nifty by 30 basis points in 2024, it underperformed by 4.1 percentage points in the last quarter due to a significant correction in some holdings. Despite this, the portfolio has delivered a return of 186.7 per cent since its inception in January 2021, compared to 77.3 per cent for the Nifty.