CLSA Model Portfolio: Which Stocks Did the Company Exit and Which Did It Buy?

Synopsis: A global brokerage exits two legacy giants and backs fresh consumption and auto plays, signaling a bold strategic shift after 18 months of caution on Indian markets.

After staying on the sidelines for over a year and a half, a leading global brokerage has turned constructive on Indian equities. It has reshuffled its portfolio with conviction, dropping established names and picking up stocks it believes offer stronger upside in the current macro setup.

The Iran conflict, which had rattled global energy markets and pushed risk sentiment to uncomfortable levels, has now shown signs of easing. The escalation fears had triggered a sharp spike in crude oil prices, squeezing margins across industries and dampening foreign institutional investor appetite for emerging markets like India. Supply chain disruptions and the threat of a wider regional war had kept institutional money on the sidelines for months. With those pressures now appearing to subside and oil prices stabilizing, global capital is finding its footing again and rotating back into risk assets.

The Strategic Pivot: Moving from Defensive Giants to Growth Outperformers

Global brokerage CLSA has turned constructive on Indian equities after 18 months of caution, citing improved risk-reward dynamics. The brokerage believes markets have already absorbed the major macro and geopolitical shocks, including those linked to the Iran conflict. In its view, the so-called “Max Pain” phase is now largely behind us, setting up a more stable environment for investors.

Stocks Added to CLSA’s Model Portfolio

CLSA has added Varun Beverages, Mahindra & Mahindra, and Vedanta Limited to its model portfolio. The inclusion of Varun Beverages reflects the brokerage’s confidence in a consumption recovery story, while Mahindra & Mahindra signals optimism around the broader auto sector, particularly in the UV and EV segments where M&M has been gaining strong ground. Vedanta’s addition comes as CLSA bets on a stronger post-conflict recovery and better upside potential in the metals space, with global metal demand expected to pick up as geopolitical tensions ease and infrastructure spending accelerates across economies.

Stocks Removed from CLSA’s Model PortfolioOn the exit side, CLSA has moved out of ITC Limited, Bajaj Auto, and UltraTech Cement from its model portfolio. These were not minor trims but deliberate exits, signaling that the brokerage sees limited incremental upside in these names. The removal of UltraTech Cement in favour of Vedanta further underlines CLSA’s broader conviction that cyclical and commodity plays offer significantly more room to run from current levels compared to defensive or rate-sensitive sectors.

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