Chris Wood, Jefferies’ long-time India bull, is strategically re-evaluating and adjusting parts of his India exposure. This shift comes amidst surging market valuations, a significant $13 billion promoter sell-off, and a sharp rebound in Indian markets from their April lows. In his latest GREED & fear report, Wood highlighted that valuations have once again become a critical concern, particularly within the mid-cap segment. While maintaining his overarching bullish sentiment on India, Wood is implementing tactical changes, pivoting away from certain sectors and reallocating capital to better align with evolving market dynamics.

A key aspect of Wood’s revised strategy is a notable shift in focus from investment-driven themes towards consumption-facing and financial plays, especially following the Budget 2025 announcements. This pivot is evident in his portfolio reshuffling. He has notably exited Larsen & Toubro and Thermax, names that previously represented bets on India’s infrastructure and private capital expenditure cycles. These exits signal a more stringent focus on valuation and earnings momentum, with Wood choosing to redeploy capital into holdings that are more congruent with prevailing market themes. ABB India now stands as the sole industrial name retained in his portfolio, reflecting a significantly pared-down approach to the infrastructure sector.

In the financial sector, Wood has removed industrial lender REC from the Asia ex-Japan thematic portfolio. Simultaneously, he has introduced new names in retail finance to his India long-only portfolio, including Home First Finance and Manappuram Finance, each with 4% weightings. This move underscores growing optimism regarding the consumer credit cycle. He also continues to track Bajaj Finance, which has seen a substantial 35% year-to-date gain, benefiting from the Reserve Bank of India’s front-loaded rate cuts and cash reserve ratio reductions, alongside evidence of a more dovish RBI governor.

Despite some exits, real estate remains a strong conviction for Wood, evidenced by a hefty 19% weighting to property developers in his India portfolio. While Godrej Properties was removed, core holdings such as DLF, Macrotech Developers, and Aditya Birla Real Estate have been maintained. Wood expressed confidence that the Indian property market, now in its fifth year of an upturn, has considerable further growth potential. Jefferies’ own analyst, Abhinav Sinha, anticipates an acceleration in pre-sales for top developers, projecting a rise to 22% in FY26 from a four-year low of 17% in FY25.

In line with the consumption pivot, Wood has augmented his portfolio with TVS Motor, assigning it a 4% weighting. He has also retained Eternal (Zomato) and InterGlobe Aviation in the India long-only portfolio. Wood reiterated that consumer finance stocks have experienced sharp rallies, driven by monetary easing and shifting investor preferences. This broader strategic tone suggests increasing comfort with the prospects of urban consumption and aspirational discretionary demand in India.

Furthermore, Wood has increased his backing for digital expansion themes. Bharti Airtel received a 1 percentage point increase in its weighting, signifying continued confidence in the telecom giant. PolicyBazaar (PB Fintech), another digital platform, also saw its portfolio weight augmented by 1 percentage point, reflecting a positive outlook on its growth trajectory.