Bernstein has reshuffled its India model portfolio, adding Adani Ports, Eternal and Paytm while removing Avenue Supermarts, or DMart.
The portfolio changes come alongside Bernstein’s assessment of what it calls India’s “distortion economy”—an environment where policy interventions, government transfers, subsidies, liquidity and other structural factors are increasingly influencing economic growth and corporate performance.
According to Bernstein, these distortions can create significant investment opportunities, although investors should be careful about treating policy-supported growth as a permanent improvement in underlying fundamentals.
“Distortions can persist far longer than investors expect. The key is not to fight them, but to identify who benefits while they last,” it said in a recent note.
Moreover, the brokerage has retained its Nifty target of 26,000 while maintaining a modest view on broader market returns. Its strategy highlights beneficiaries across consumption, automobiles, financials, logistics, quick commerce and policy-supported industries.
Portfolio changes
Adani Ports has been added to Bernstein’s model portfolio with a target price of ₹1,973. The brokerage’s positive view is based on the company’s healthy balance sheet, pricing power and potential upside from its international business.
Eternal has also entered the portfolio, with Bernstein assigning a target price of ₹350. The brokerage expects easing competitive pressure in quick commerce and an improving trend in EBITDA and order value to support the company’s outlook. Eternal’s addition also fits closely with Bernstein’s broader economic thesis around the expansion of India’s gig and delivery ecosystem.
“Quick commerce and food delivery companies such as Eternal and e-commerce ones such as Delhivery and other such ecosystem beneficiaries stand to gain from this dynamic,” stated the brokerage. Bernstein believes that government transfers and welfare support could have implications for the labour market and flexible employment, potentially benefiting businesses that depend on logistics, delivery and last-mile networks.
The third addition is Paytm, which has the highest potential upside among the three new names, according to Bernstein’s target price of ₹2,200. The brokerage sees a possible rollout of a UPI merchant discount rate, or MDR, as a potential margin catalyst. At the same time, it believes the company’s core payments business could help limit the downside.
The portfolio change has resulted in the removal of Avenue Supermarts, better known as DMart. Bernstein’s decision follows the stock’s recent outperformance, with the brokerage pointing to intensifying competition from quick-commerce platforms as an increasing risk to the company’s urban consumption base.
The model portfolio now consists of 13 stocks and continues to be anchored by names including L&T, NTPC, Titan, HDFC Bank and Axis Bank.
Titan, M&M, Financials and Policy Beneficiaries Remain in Focus
Beyond the model portfolio changes, Bernstein has identified several sectors and companies that could benefit from the economic and policy trends it is tracking.
One major theme is the potential consumption boost from government wage revisions. The brokerage expects this to support discretionary consumption, although it has also cautioned that the eventual impact on government finances could limit spending on subsidies and capital expenditure.
It added that passenger vehicles remain one of the most attractive ways to play this theme, particularly after the recent correction.
Titan remains one of the companies that Bernstein sees as a potential beneficiary of stronger premium consumption and discretionary spending.
Mahindra & Mahindra is also in focus as a play on resilient rural demand. Bernstein believes government transfers and rural support measures could help consumption remain stronger than expected, benefiting companies with significant exposure to rural India.
Financial stocks form another important part of the brokerage’s strategy. Bernstein has pointed to external borrowing and FCNR-driven liquidity as a possible support for the banking system. As liquidity translates into credit growth, stronger loan growth could support the sector even if margins remain under pressure.
Bernstein has also highlighted policy-backed sectors, particularly those benefiting from production-linked incentives, as important areas for investors. Electronics Manufacturing Services companies, emerging aerospace and defence players and the electric vehicle ecosystem could benefit from continued government support.
The brokerage has noted, however, that investors need to distinguish between companies receiving temporary support and businesses where policy intervention is helping build sustainable long-term economic value.
Bernstein’s message to investors is that India’s economic environment is increasingly being shaped by policy support, government transfers, liquidity and structural changes. These forces may not always represent permanent improvements in economic fundamentals, but they can significantly influence corporate earnings and stock performance.
For now, the brokerage’s reshuffled 13-stock portfolio reflects where it believes those benefits are most likely to emerge—from infrastructure and banking to premium consumption, automobiles, ports, digital payments and the rapidly expanding quick-commerce ecosystem.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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