Jefferies drops Zomato, adds Tata Steel and Hindalco

Mumbai: Jefferies has removed Zomato from its India model portfolio and added Tata Steel and Hindalco as part of the larger shift in its equity strategy toward banks, industrials and select conglomerates anticipating a pickup in the broader capex cycle including the housing sector

"We are incrementally wary of a potential rise in competitive activity in the sector (online food delivery) as its chief competitor, Swiggy, has recently seen market share loss," said Jefferies said in a client note..

The investment bank said the reopening of China's economy, together with peaking of interest rates in the US, bodes well for industrial commodities such as metals and crude oil that could benefit from demand improvement and price stability.


As part of its India model portfolio, its weightage on Hindalco and Tata Steel now stands at 2.5% each compared with 0.8% and 1.1%, respectively.

From a sector view point, it has maximum exposure to banks and financials with a 39.6% weightage - two percentage points above equal-weightage. Within the BFSI space, ICICI Bank remains the top pick with 11.9% weight (against 7.9% neutral weight) followed by SBI at 8% weight (versus 2.9% equal weight).