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MOSL: Morning India (30/November/21): 1. Financials (Realigning MOdel Portfolio to ride next leg of recovery); 2. Automobiles; 3. Cement

MOrning India (30/November/21): 1. Financials (Realigning MOdel Portfolio to ride next leg of recovery); 2. Automobiles; 3. Cement

 

Today’s top research idea

Financials: Realigning MOdel Portfolio to ride next leg of recovery

• The MOFSL BFSI MOdel Portfolio delivered an in-line performance (-15bp) to the underlying benchmark (Nifty Financial Services Index) as banks (+32bp), insurance, and non-lending financials (+94bp) outperformed. However, this was offset by a sharp underperformance from NBFCs (-143bp), primarily due to our Underweight stance on the Bajaj Group. However, interestingly, our key OW calls on ICICIBC, SBIN, MUTH, ISEC, and IIFL Wealth have all delivered superior returns.
• While the earnings outlook remains encouraging, a) concerns around a potential third COVID wave and b) sell-offs by FIIs remain overhangs. Thus, we realign our MOdel Portfolio to navigate these headwinds. In terms of major changes, we increased our Overweight stance on ICICIBC, AXSB (to reflect the price movement), and SBILIFE. We have moderated our weights marginally for SBIN, MUTH, IIFLW, and ISEC (after a sharp outperformance) and reduced our Underweight stance on KMB, HDFC, and Bajaj Group. We have added ANGELONE and removed HDFCLIFE and MAXF from the model portfolio.

Piping hot news

The IPO sale is still on: 7 cos plan to raise over Rs 19,000 crore in Dec

• At least seven companies plan to launch their initial public offerings in the next 10-15 days to raise more than Rs 19,000 crore, according to bankers. Star Health's issue is opening on Tuesday, while software companies CE Info Systems and RateGain Travel, as well as Anand Rathi Wealth will launch their IPOs next week. The IPOs of Adani Wilmer and Go First Airlines are likely to open for subscription in the second or third week of December. Tega Industries' offer will open on Wednesday.