Jefferies said that after a prolonged wait, India and the United States have agreed on a trade deal that materially improves investor sentiment, following a sharp reduction in tariffs on bilateral trade.
According to Mahesh Nandurkar of Jefferies, tariffs on India’s exports to the United States have been reduced from 50% to 18%, while tariffs on US exports into India have been cut to zero, with the brokerage noting that most agricultural products may not be included. Jefferies said the development represents a major positive for investor sentiment.
The brokerage highlighted auto ancillaries, solar manufacturers, chemicals, textiles and Adani Group companies as key beneficiaries of the trade agreement. Jefferies also said it has added Eternal, described as a foreign portfolio investor favourite, to its model portfolio.
As part of its portfolio changes, Jefferies said it has trimmed its allocation to the IT sector and increased exposure to metals, adding Hindustan Zinc and JSW Steel. This takes the materials sector to overweight after recent stock weakness. Jefferies noted that Hindustan Zinc offers silver and zinc exposure with a strong cost advantage, with spot silver trading around 50% above the December-quarter average, and expects EBITDA growth of 41% in FY27E.
For JSW Steel, Jefferies said it expects strong quarter-on-quarter improvement as Indian steel prices rise following safeguard duties and China’s anti-involution measures. The brokerage expects JSW Steel’s EBITDA to grow 34% QoQ in the March quarter and 45% year-on-year in FY27.
Jefferies also said it has replaced Godrej Consumer Products with Eternal in its model portfolio, citing strong growth and margin improvement across quick commerce and food delivery. The brokerage noted that the stock is around 25% off its peak, improving the risk–reward profile.
Disclaimer: This article is based solely on brokerage commentary. The views expressed are those of Jefferies and do not constitute investment advice or recommendations by the publication.
