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HomeMarket NewsKotak Institutional Equities increases weightage on RIL, L&T in model portfolio, Hindalco dropped
Kotak Institutional Equities has removed Hindalco, which had a weightage of 170 basis points from the Model Portfolio. That weightage has been used to increase positions in Reliance Industries and L&T.
Brokerage firm Kotak Institutional Equities has increased its weightage on Reliance Industries Ltd. (RIL) and Larsen & Toubro (L&T), in its model portfolio, in its latest note on Wednesday, November 5.
The weightage on Reliance Industries has been increased by 100 basis points to 9.9%, while that on L&T has been increased by 70 basis points to 2.7%, the Kotak note, authored by Sanjeev Prasad, stated.
On the flip side, the brokerage has removed Hindalco, which had a weightage of 170 basis points from the Model Portfolio. That weightage has been used to increase positions in Reliance Industries and L&T.
Kotak Institutional Equities expects strong performance across all three major segments of Reliance over the next few quarters led by strong global refining margins due to possible disruption of global diesel supply, continued strong performance of the digital and telecom segment and a potential tariff increase over the next few weeks, and a robust performance of its retail business aided by a long growth runway.
The brokerage has a price target of ₹1,600 on Reliance Industries, which implies a potential upside of another 9% from current levels.
For Larsen & Toubro, robust order backlog in the core E&C segment, large pipeline of new projects both in India and the Middle East, will contribute to the strong financial performance of the company, according to Kotak's note. The brokerage has a price target of ₹4,200 on L&T, which implies a potential upside of 7% from current levels.
The brokerage has removed Hindalco from its model portfolio, given the fact that the stock has risen 9% in the last one month and 26% in the last three months. It sees meaningful downside for the stock from current levels, as its price target of ₹705, which implies a potential downside of 15% from current levels.
Kotak Institutional Equities wrote in its note that the current earnings season has shown subdued trends in mass consumption items but an uptick in select discretionary segments, modest IT services demand and moderate loan growth for banks. However, aggregate earnings are ahead of their estimates.
