CLSA raises weightage on Infosys, Axis Bank

Mumbai: Foreign brokerage CLSA has increased weightage on Infosys and Axis Bank in its model portfolio and reduced weightage on Apollo Hospitals, Maruti Suzuki (India) and Mahindra & Mahindra.

The weightage on Axis Bank, which delivered better-than-expected December quarter result on Tuesday, has been increased by 1.5 percentage points by removing Apollo Hospitals, which has a high promoter pledging ratio of 75 per cent. While removing Apollo Hospitals from the portfolio, CLSA said that pledging of shares is an issue for select companies and is not a systemic issue.

"The recent results from ICICI Bank and Axis Bank give us more confidence that the NPL cycle has indeed peaked out for sure for these two," said CLSA.


Axis Bank has also been on the radar of domestic mutual funds who have added corporate banks to their portfolios in the December quarter, with a big addition of Axis. Banking sector has also beome the biggest overweight for domestic mutual funds, overtaking the industrial sector which is the other big overweight for them.

The brokerage has also increased overweight on IT services companies for the December quarter as these companies have reported strong growth in revenue and given optimistic commentary on growth.