Valuation concerns reemerge after dovish cenbank-driven Indian market rally, says Jefferies

Home First Finance India

20/06/2025 10:09

** Indian stock market rebound since April fueled by a more dovish RBI under Governor Sanjay Malhotra, says Jefferies strategist Chris Wood

** Benchmark Nifty .NSEI, Sensex .BSESN gain 6.5% each since April

** RBI delivered surprise 50 bps rate cut and 100 bps CRR reduction in June

** Jefferies expects another 25 bps rate cut by year-end, but flags stretched valuations as a concern

** Elevated valuations are prompting corporates to tap capital markets aggressively, posing a risk to market stability

** Equity supply hit $7.2 billion in May and has reached $6 billion in June, approaching levels last seen in September 2024

** Jefferies removes Larsen & Toubro LART.NS, Thermax THMX.NS, and Godrej Properties GODR.NS from its India long-only portfolio

** Reallocates 4 percentage points each to TVS Motor TVSM.NS, Home First Finance HOME.NS, and Manappuram Finance MNFL.NS, citing measures to boost consumer finance sector

** Increases exposure in PB Fintech PBFI.NS and Bharti Airtel BRTI.NS by 1 percentage point each

 (Reporting by Bharath Rajeswaran in Bengaluru)

 ((bharath.rajeswaran@thomsonreuters.com; +91 9769003463;))