Jefferies' Chris Wood, in his latest 'Greed and Fear' note, has termed India the best "domestic demand story" among the emerging market universe.
"If Asia looks better in aggregate on comparative valuations, there is one market where valuations are undoubtedly challenging. That is greed and fear's long-term favourite, India," he wrote.
The Nifty Index trades at 18.8 times 12-month forward earnings currently, compared with a historic 10-year average of 17.2 times, he said. However, if this is "somewhat of a concern tactically, the fact remains that India remains by far the best domestic demand story structurally in the Asia and emerging market universe".
Wood's much-followed long-only equity portfolio for India rose by 1.7% last quarter in dollar terms on a total-return basis, compared with a 2.1% gain in the MSCI India benchmark.
"For 2022 as a whole, it declined by 8.4% compared with a 7.5% decline in the benchmark. As a result, it is now performing almost in line with the benchmark since inception (July 1, 2021), rising by 4.5% as at the end of 2022, compared with a 4.6% gain in the MSCI India Index."
Wood had tweaked the portfolio about two weeks ago, adding REC Ltd. with a 4% weightage. "This will be paid for by shaving the investments in HDFC Bank, Bajaj Finance, ICICI Prudential Life Insurance, and ICICI Lombard General Insurance by one percentage point each," he had written.
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