Prabhudas Lilladher (PL Capital) has made a decisive shift in its model portfolio, adding five new high-conviction names - State Bank of India, Mahindra & Mahindra, Tata Steel, Amber Enterprises and Latent View Analytics - while trimming exposure to defensives such as Bharti Airtel, Aster DM Healthcare, Crompton Greaves and Ingersoll Rand India.
Notably, Latent View Analytics has made its debut in PL’s high-conviction list as the first explicit AI-linked stock in the brokerage’s strategy portfolio this year. PL cited the company as a “pure-play data analytics and AI services provider” positioned to benefit from the global shift toward decision-support automation and the domestic surge in Global Capability Centers (GCCs).
The firm said India’s GCC ecosystem could become a $100-billion opportunity by 2030, employing over one lakh new professionals in FY25 alone - a structural cushion against slower traditional IT hiring and visa-related disruptions.
PL also turned overweight on banks, NBFCs, autos, retail, consumer staples and metals, which it said are well-placed to outperform in the current macro backdrop.
Among the top banking bets, SBI saw its model-weight rise by 50 bps, supported by recent RBI reforms - including the removal of the Rs 10,000-crore lending cap and the roadmap for Expected Credit Loss (ECL) norms by 2027 - which are expected to unlock credit supply and aid margin expansion.
In autos, Mahindra & Mahindra and Eicher Motors saw their weightage rise as PL said it expects the GST reset and the festive tailwind to lift both passenger and two-wheeler demand. The brokerage also noted a strong pick-up in consumer spending since late September across durables, apparel and footwear.
The rejig of model portfolio reflected a turn toward domestic-facing cyclicals with increased weights in banks, autos, metals and consumer stocks, and reduced exposure to capital goods, healthcare and energy. The move aligns with PL’s broader macro call that India’s economy is poised for a demand-led revival in H2FY26 as inflation moderates, RBI eases rates, and benefits of policy support kick in.
Despite global headwinds such as heightened US tariffs, H-1B visa fee hikes, and geopolitical volatility, India’s economy and equity markets continue to demonstrate remarkable resilience, the brokerage said in its latest India Strategy Report.
With normal monsoon, a 100 bps cut in interest rates, GST rationalisation and tax cuts in 2025 Budget, conditions appear conducive for a strong revival in consumption, PL Capital said.
Despite trimming the FY26 and FY27 Nifty EPS estimates by about 2 percent, PL has raised its 12-month Nifty target to 28,781 (from 27,609 earlier), valuing the benchmark at 19.2x FY27 earnings of Rs 1,499.
The brokerage sees a 12.1 percent earnings CAGR over FY25-27, led by banks, NBFCs, autos and consumer sectors.
PL Capital also assigned a bull-case target of 30,220 and a bear-case floor of 25,903, viewing the index’s current valuation - around one percent below 15-year forward P/E average - as a “favourable entry point”.
Macro Underpinnings: Private Capex Coming
Beyond equities, PL underscored a shift from public-led investment to private-sector capex as capacity utilisation rises. While government capital spending has already tripled since FY21, incremental upside will now depend on private investment response, the note said.
India’s Q1FY26 GDP growth at 7.8 percent has reaffirmed the economic resilience, and RBI’s upward revision of FY26 growth to 6.8 percent strengthens the case for cyclical rotation. High-frequency indicators - GST collections, e-way bills, and credit growth - continue to signal underlying demand momentum.
PL’s portfolio changes indicate that the brokerage sees the next leg of market performance being led by domestic demand and financials, and not defensives. The addition of Latent View Analytics gives the portfolio a modern tech overlay, reflecting how India’s cyclical and structural growth stories are now converging.
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