Jefferies’ Christopher Wood retained a constructive view on India’s structural growth prospects, arguing that the country’s investment story extends beyond the current global focus on artificial intelligence.
In his latest GREED & fear report dated September 24, Wood highlighted rising private-sector capital expenditure, manufacturing, renewable energy, electrification and infrastructure as key areas supporting India’s longer-term growth.
The report noted that Jefferies’ India research had identified six emerging growth areas combining government policy support with increasing private-sector participation: space, semiconductors, solar manufacturing, data centres, electronics and aerospace. Government support was visible through incentive schemes, tax holidays and localisation requirements.
“India continues to enjoy its own structural growth story which will prove resilient at a time when the current near all-consuming focus on AI diminishes,” said Christopher Wood, Jefferies.
Wood also highlighted signs of improving private-sector investment. India’s annualised nominal gross fixed capital formation-to-GDP ratio rose to 32.4% in the four quarters to June from 31.4% in the four quarters to December. Machinery-goods imports increased to US$66 billion in the 12 months to August 2026 from US$29 billion in FY21.
Energy, manufacturing to remain key India growth themes
Energy emerged as one of the strongest structural themes in Wood’s India assessment. He pointed to the expansion of electrification and renewable energy, particularly solar, and argued that India’s development could benefit from China’s experience with grid expansion and battery-storage technology.
“More days in India convinces GREED & fear that the best structural growth story top down remains energy in terms of the private sector build out of electrification via the expansion of renewable energy, primarily in the form of solar.” — Christopher Wood, Jefferies.
The report pointed to China’s experience, where battery-storage technology and grid expansion had helped make solar cheaper than coal. Wood said a similar development in India could significantly reduce the cost of power and support the country’s manufacturing ambitions.
“Solar is already cheaper than coal in China thanks to battery storage technology. If that happens in India, the resulting likely collapse in the cost of power can only be a major positive for the country’s growing manufacturing ambitions.” — Christopher Wood, Jefferies.
India was also described as a significant manufacturing economy despite the perception that the country had lagged services. Jefferies noted that India ranked second to China in several traditional manufacturing categories, including crude steel, cement, ammonia, mobile phones and solar modules, although the production gap with China remained substantial.
Wood also highlighted the expected rise in India’s electricity demand. Hitachi Energy India CEO Venu Nuguri had projected total final energy demand to rise 50% and electricity demand to double to 3,365 TWh by 2035. The share of electricity in final energy demand was expected to rise from 19% in 2023 to 25% in 2035.
“Hitachi Energy, given its expertise in transmission, is a picks and shovels play on this theme. That is understood by the market given that it is trading at 71x 12-month forward earnings having rallied by 68% year to date.” — Christopher Wood, Jefferies.
Chris Wood’s 22-stock India portfolio
Against this backdrop, Wood made one change to Jefferies’ India long-only equity portfolio. ABB India was removed and Hitachi Energy India was added, with the latter receiving a 5% portfolio allocation. Jefferies said the change reflected the investment case presented by its India industrial analyst Lavina Quadros.
“Hitachi Energy is a picks and shovels play on this theme.” — Christopher Wood, Jefferies.
The updated portfolio, benchmarked against MSCI India, contained 22 stocks across financials, energy, real estate, ports, travel, consumer, telecom, airlines, hotels, healthcare, automobiles, online travel, commodity exchanges and retail. Jefferies said the portfolio was designed with a one-year investment horizon while targeting long-term absolute returns.
Chris Wood’s Jefferies India portfolio:
The September 24 update therefore marked a shift within the industrial exposure of Wood’s portfolio, with Hitachi Energy India replacing ABB India, while the broader portfolio continued to combine financials with India’s infrastructure, energy, consumption and services themes.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
