CLSA turns constructive on Indian equities after 18 months; shifts to alpha strategy

CLSA turns constructive on Indian equities after 18 months; shifts to alpha strategy The brokerage said sentiment had reached extreme bearishness, while valuations on both absolute and relative basis were trading below 10-year averages, indicating a more favourable entry point for investors. CLSA added that its portfolio outperformed the Nifty by 6 percentage points in the March quarter, but it has now moved away from a beta-controlled strategy to a more traditional alpha-seeking approach. As part of portfolio changes, CLSA exited ITC in favour of Varun Beverages and replaced Bajaj Auto with Mahindra and Mahindra. It prefers Vedanta over UltraTech Cement in a post-war scenario and sees Larsen and Toubro as a recovery play, replacing defensive exposure to NTPC. The brokerage also sees better risk-reward in Bajaj Finance compared to IndusInd Bank. CLSA has raised its overweight position on financials and cut IT to underweight, swapping Tech Mahindra for HDFC Bank. It continues to hold

, State Bank of India, ONGC, Tata Motors, Infosys, Avenue Supermarts, Eternal and Godrej Properties in its portfolio. All this is for information only. This is not a buy/sell recommendation.