Jefferies India report: Amid soaring US bond yields, which have put long-term pressure on the Indian stock market, Jefferies India has increased its weight in large-cap stocks. The global investment bank strongly believes that large-caps offer better risk-reward relative to mid-caps in the current market environment.
According to the latest Jefferies India report dated October 6, 2026, it announced an increase in weightage in Reliance Industries shares. The global investment bank also declared that it has added two more large-cap stocks to its model portfolio. Those two stocks are Kotak Mahindra Bank and Welspun Corp. However, Jefferies India has trimmed weightage in the rate-sensitive segments, NBFC and Real Estate.
Why is Jefferies India bullish on Indian large-caps?
Highlighting the reason for increasing weightage on the large-cap stocks, the Jefferies India report said, “We increase weight on Largecaps. We believe risk-reward is becoming more favourable for large caps on better relative valuations vs Midcaps, while the earnings growth gap is narrowing over FY26-28E.”
Hint at the market bottom
The latest Jefferies report also hints at a possible bottom in the making on Dalal Street, saying, “Markets are facing rising yields with the US 10Y Treasury yield above 5% (20+yr high), Japan’s 10Y yield above 3% (30yr highs), and UK & German govt bond yields also moving higher. Apart from inflation, markets are also pricing in worsening fiscal balances, declining participation from foreign central bank buyers and large debt-funded capex for AI buildout. Our global equity strategist Christopher Wood believes that US 10Y yields above 5% create a growing risk for US equities.”
In an email interaction with LiveMint, Chris Wood, Head of Equities at Jefferies, said that equity investors can expect a boom in Indian equities once the correction in US bond yields begins. He had said the US government can’t afford elevated US bond yields for long, and they might resort to US bond yield suppression, if not fixing US bond yields like Japan.
Jefferies raises weightage in Reliance | Adds Kotak Bank, Welspun Corp
The global investment bank has added Welsoun Corp and Kotak Mahindra Bank shares in its Model Portfolio. It has increased the weightage of Reliance Industries Ltd shares.
“(We) increase weight on Reliance in our Model Portfolio with stock at attractive valuations (8.4x 1yr fwd EV / EBITDA, 23% below 10yr avg) and upgrade possibilities on higher GRMs. Kotak Mahindra Bank is added on leadership overhang removal, potential growth acceleration from 15%+ levels and stock at 1.8x P/ABV FY27E, ~50% disc. to 10-yr avg. We also add Welspun Corp, which should benefit (30%+ EBITDA and EPS CAGR over FY26-29E) from a multi-year upcycle in oil & gas infra spending in the US and the Middle East, supported by local manufacturing.”
The Jefferies India report also said that it is overweight on Eicher Motors.
Disclaimer: This story is for educational and informational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified financial experts before making any investment decisions.
