Citi drops TaMo & IndusInd from model portfolio, adds Havells, Titan

Citigroup Global Markets has dropped Tata Motors, Shriram Transport, IndusInd Bank and Sun TV Network from its model portfolio. While Citi has streamlined the portfolio by cutting the number of stocks in it to 34 from 38 earlier, it has replaced Crompton Consumer with Havells and Dabur with Titan. Citi has maintained overweight stance on financials, cement and healthcare and is underweight on consumer staples and materials (excluding cement).

The firm has also increased underweight on auto/staples and reduced underweight on IT services sector.

Citi remains cautious on the Indian market despite the 5 per cent correction since the end of April.


“Despite the recent 5 per cent correction, valuations are still 1sd (standard deviation) above mean. Given the near/medium-term political/global uncertainties plus earnings downgrade risks, we remain cautious,” said Citi.

The firm said recent production and consumption trends have both looked weak, implying risks to earnings in the current financial year, said Citi. Earnings in the quarter ended March have grown at 32 per cent from the year ago period, but yet it is below the expectations of 41 per cent, said Citi.

“FY19 is likely yet another singledigit YoY growth fiscal and we expect downgrades to persist in FY20, given high dependence on decline in credit costs in financials and growth risks in consumer sectors,” said Citi.