From Tech Titans to Consumer Champs: PL Capital’s Bold Portfolio Overhaul

Image Source: Business Today

Local brokerage PL Capital has undertaken significant reshuffles in its high conviction portfolio with market volatility fuelled by weak domestic demand, foreign institutional investor (FII) offloading, and international tariff wars. The company has deleted large caps such as Infosys, Reliance Industries, and Larsen & Toubro and replaced them with five new additions in multiple sectors into its model portfolio.

Market Context: Nifty50 has fallen 3.8% year-to-date on account of sluggish domestic demand, declining earnings expectations, and FII selling, coupled with persistent US-China tariff wars.

Portfolio Changes:

Deleted Stocks: Infosys, Reliance Industries, Larsen & Toubro, Polycab India, and Doms Industries have been deleted on account of short-term growth issues and low re-rating potential.
Added Stocks: ITC, IRCTC, KEI Industries, Triveni Turbine, and Eris Lifesciences have been added to the high conviction picks. These additions indicate optimism in industries such as consumer staples, travel, power equipment, and pharmaceuticals.

Sector Outlook:

Optimistic on consumption-related industries such as hospitals, pharmaceuticals, retail staples, banks, defense, and power.
Mixed demand dynamics seen with rural regions indicating positivity while urban demand continues to be sluggish.

Economic Projections:

Nifty's EPS estimate reduced by 6.2% for FY26 and 5.6% for FY27.
Nifty50 priced at a 7.5% discount to its 15-year average price-to-earnings multiple with a March 2027 EPS estimate of 1460.

Global Challenges:

Extended US-China tariff wars likely to shave global GDP growth by 0.5% in the first half of 2026.
Volatility in commodity and currency markets continues to affect crude prices and IT services growth.

PL Capital's strategic re-ordering reflects judicious optimism despite external economic constraint and targeting businesses with potential in the current economic environment.

Sources: Business Today

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