Archive · 6 Oct 2026
Jefferies Favors Large-Caps, Adds Kotak Bank and Welspun
Jefferies India has changed some of the stocks it recommends in its model portfolio.
It increased its investment weighting in Reliance Industries and added Kotak Mahindra Bank and Welspun Corp.
The firm thinks large companies offer a better balance of risk and possible returns than mid-sized companies right now.
It says large-cap stocks look cheaper compared with mid-caps, while the difference in expected earnings growth is getting smaller.
Jefferies also reduced its weighting in non-bank finance companies and real estate, which can be sensitive to interest rates.
The report noted that government bond yields have risen in several countries.
Jefferies strategist Christopher Wood said high US bond yields pose a growing risk to US stocks.
Jefferies also said investors could see a boom in Indian equities once US bond yields begin to fall.
Jefferies India increased its model-portfolio weighting in Reliance Industries and added Kotak Mahindra Bank and Welspun Corp.
The report favors large-caps over mid-caps, citing more attractive relative valuations and a narrowing earnings-growth gap for FY26–28E.
Jefferies said it trimmed exposure to rate-sensitive non-bank financial companies and real estate.
The report pointed to rising government bond yields globally and said US 10-year yields above 5% pose growing risks for US equities.
Jefferies remained overweight on Eicher Motors and cited potential catalysts for each of its newly added or increased holdings.
- Who
- Jefferies India, with comments from Jefferies equities head Christopher Wood.
- What
- Jefferies increased its weighting in Reliance Industries, added Kotak Mahindra Bank and Welspun Corp, and favored large-caps over mid-caps.
- When
- The report was dated October 6, 2026.
- Where
- The report concerns Indian equities and also discusses global bond yields, including those in the United States, Japan, the United Kingdom and Germany.
- Why
- Jefferies said large-caps have more favorable relative valuations than mid-caps as their earnings-growth gap narrows; it also cited company-specific growth prospects for its portfolio changes.
Large-Cap Case
Market Risks
Large-caps versus mid-caps
Large-Cap Case
Jefferies believes large-caps offer more favorable risk-reward because their relative valuations are better and the earnings-growth gap is narrowing.
Market Risks
The report notes that rising global bond yields are putting long-term pressure on the Indian stock market; it does not present a separate argument favoring mid-caps.
High US bond yields
Large-Cap Case
Christopher Wood said investors could expect a boom in Indian equities once the correction in US bond yields begins.
Market Risks
Wood said US 10-year yields above 5% create a growing risk for US equities; the report also cited higher yields and other pressures in global markets.
- Report date
- October 6, 2026
- Increased weighting
- Reliance Industries
- New additions
- Kotak Mahindra Bank and Welspun Corp
- Reduced weighting
- Rate-sensitive non-bank financial companies and real estate
- Large-cap rationale
- More favorable relative valuations versus mid-caps and a narrowing earnings-growth gap over FY26–28E
- US bond-yield level cited
- The report said the US 10-year Treasury yield was above 5%.
- Other portfolio stance
- Jefferies said it was overweight on Eicher Motors.