Stocks In Focus: Kotak Drops TCS, DLF, Lodha From Model Portfolio; Adds Adani Ports, Eternal And More

Kotak Institutional Equities has trimmed TCS, DLF and Lodha from its model portfolio, reallocating a combined 460 basis points into Adani Ports and SEZ, Eternal, GMR Airports, HDFC Life, HDFC Nifty 50 ETF (HNDL) and SHFL.

TCS, cut by 180 bps, has been dropped after a 19% rally since early July. Kotak said the brokerage remains unconvinced that the stock's "reasonable" valuations reflect the sector's structural challenges, calling IT services the near-term "antithesis of the AI theme."

DLF and Lodha, together accounting for 280 bps, were removed on concerns over stagnating residential volumes and affordability pressures, even as Kotak said it remains a "firm believer" in India's long-term housing prospects. Both stocks have surged since the April trough — DLF by 32% and Lodha by 84%.

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Among the additions, Adani Ports and SEZ gets a 150 bps weight after the stock corrected 10% from its recent peak on concerns around a reported UK acquisition. HDFC Life, allotted 100 bps, trades at 1.4 times one-year forward embedded value, which Kotak said "more than adequately" reflects investor concerns around regulatory uncertainty.

In the mid-cap portfolio, Kotak added Kalpataru Projects, trading at 14.5 times one-year forward earnings, with FY27 and FY28 earnings per share seen growing 30% and 24% respectively on a strong order book and rising exposure to transmission and building segments. 360ONE was dropped after a 7.4% rise over the past month.

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