1 week ago
Bernstein Rejigs India Portfolio Amid Tougher Earnings Outlook
Bernstein changed the list of Indian companies it recommends watching closely.
It added Adani Ports, Eternal and Paytm.
Adani Ports was chosen because Bernstein sees strength in its finances, pricing and international business.
Eternal was added because its food-delivery business is growing and it appears strong in quick commerce.
Paytm was included because a possible change to merchant payment fees could improve its earnings.
Bernstein removed DMart because it sees no clear short-term direction for the company.
It is also concerned about quick-commerce competition, weak sowing and high wholesale inflation.
Bernstein still expects the overall market to grow, but it is looking for individual companies with specific reasons to perform well.
Bernstein added Adani Ports, Eternal and One97 Communications to its India model portfolio.
Avenue Supermarts, the operator of DMart, was removed because Bernstein saw limited direction and rising quick-commerce risks.
Adani Ports was backed for its balance sheet, pricing power, international business and improving global conditions.
Eternal was added after strong operating results, continued food-delivery growth and a stronger quick-commerce position.
Bernstein retained a neutral Nifty target of 26,000 while focusing on company-specific catalysts amid limited earnings-upgrade potential.
- Who
- Bernstein and the companies in its India model portfolio.
- What
- Bernstein added Adani Ports, Eternal and One97 Communications, and removed Avenue Supermarts.
- Where
- India's stock market and Bernstein's India model portfolio.
- When
- The changes were reported after the Q1 FY27 earnings season and were based on Bernstein's India Strategy report dated August 19, 2026.
- Why
- Bernstein sees limited scope for broad market earnings upgrades and is focusing on companies with visible business or policy catalysts.
Company-Specific Catalysts
Market and Competitive Risks
Investment strategy
Company-Specific Catalysts
Bernstein is prioritising individual companies with visible catalysts because broad market earnings upgrades appear limited.
Market and Competitive Risks
Tougher base effects, volatile macroeconomic conditions, richer SMID valuations and increased primary-market issuance could limit returns.
Eternal versus DMart
Company-Specific Catalysts
Bernstein believes Eternal has strengthened its quick-commerce position, delivered strong operating results and continues to benefit from food-delivery growth.
Market and Competitive Risks
Quick-commerce competition remains a risk, particularly for traditional retailers such as DMart, while Bernstein sees no decisive near-term direction for Avenue Supermarts.
Paytm outlook
Company-Specific Catalysts
A possible MDR introduction could raise Paytm's net payment margins and eventually support earnings growth, while its core business may limit downside risks.
Market and Competitive Risks
The MDR change has not been finalised, leaving the timing and financial impact of the potential catalyst uncertain.
Key facts
- Portfolio additions
- Adani Ports and Special Economic Zone, Eternal and One97 Communications
- Portfolio exit
- Avenue Supermarts, the operator of DMart
- Nifty target
- Bernstein retained a neutral target of 26,000
- NSE 200 earnings
- Growth slowed to 8% from 12.5% in the March quarter
- Nifty 200 outlook
- Bernstein expects 13% earnings growth
- Paytm catalyst
- Possible finalisation of the merchant discount rate, or MDR
- DMart concerns
- Weak sowing, wholesale inflation above 8% for four consecutive months and quick-commerce competition
Quotes
Bernstein representative
Bloomberg Bloomberg Bloomberg
“We’re removing DMart from our portfolio where we don’t see a decisive direction as of now – CPI inflation has so far been contained, but sowing has been weak, and WPI has consistently been above 8% for 4 months in a row now.”
financialexpress.com
“We’re not yet seeing earnings upgrades for the broader market, while base effects turn less favorable and the macro backdrop remains volatile.”
financialexpress.com
Venugopal Garre
Bernstein managing director
“We're removing DMart from our portfolio where we don't see a decisive direction as of now -- Consumer Price Index inflation has so far been contained, but sowing has been weak and Wholesale Price Index has consistently been above 8 per cent for 4 months in a row now. Moreover, the threat from quick-commerce is always a looming factor.”
m.rediff.com
“Mahindra & Mahindra stays in autos -- with good Q1 FY27 numbers and expectations to do better even if overall demand is expected to be slow. Zydus remains our healthcare pick, driven by its innovation-led portfolio especially in its US business, and differentiated products in India.”
m.rediff.com
Sources
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