Yes Securities has made changes in its model portfolio for investors adding Greenlam Industries, HDFC and Polycab India to its portfolio. All these stocks have a 3 percent weight each in the portfolio.
The brokerage has removed CCL Products (India) Ltd, which had 3.9 percent weight.
Meanwhile, it has increased its weight on Reliance Industries and Container Corporation Of India while, reducing weightage in Honeywell Automation India, HDFC Bank, Kotak Mahindra Bank and Jubilant Foodworks.
Here’s what the brokerage said on rating rationale:
Greenlam Industries: The brokerage is of the view that the company has a long growth runway as it expects the domestic laminate industry to grow at 8-10 percent over the next decade. The moat in the form of scale benefits – with 18 percent domestic market share, competing for the neck-to neck with Merino for the top spot in India and third-largest globally. Exceptional operating metrics of core business of laminates with EBITDA margins of around 16 percent, asset turn of 4x and ROCE of around 28 percent.
HDFC Ltd: Business traction picking up and growth commentary getting stronger. This could be a start of a long business upcycle for HDFC underpinned by multiple tailwinds. The company is well-buffered both from Balance Sheet and P&L standpoint with high capital ratios, low gearing and enhanced ECL cover. Core mortgage business can re-rate further; value accretion through subsidiaries and associates too, Yes Securities said.
Polycab India: In-house manufacturing and backward integration along with improvement in working capital cycle will lead to improvement in margins and profitability, the brokerage house said. Polycab is currently trading much below peers at 19x FY23EPS; considering strong revenue growth potential coupled with margin improvement in FMEG segment along with improvement in return ratios, stock deserves to trade at a much higher multiple of 25x.
CCL Products: Move to higher beta names and more conviction ideas. “The stock remains in our House buy list though. We will revisit in time to come,” it said.
Here is Yes Securities’ Model Portfolio:
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