Stronger economic growth, accelerating government spending, and bottoming out inflation are just some of the reasons why many analysts are bullish on India – and asset management firm AllianceBernstein is no exception. In a note dated October 9, analysts led by Venugopal Jari noted that Indian stock markets rebounded strongly in March after lagging since the end of 2021. While markets have started to decline since September, the benchmark Nifty 50 index remains elevated near 19,500 levels. They wrote: “ India was the best performing emerging market in terms of US dollar returns at 8%, ahead of Brazil at 6%.” Analysts expect the South Asian country to achieve “one of the highest returns among major markets worldwide over the next few years.” In terms of asset allocation, AllianceBernstein has an overweight on financials, while allocating a small portion of that weight to utilities. It is also overweight on consumer technology and building materials, and equally overweight on automobiles and discretionary spending, while underweight on commodities and metals. The asset manager says its portfolio has outperformed the benchmark Nifty index by 14.7% since its inception in 2019. Stock Picks Food delivery company Zomato is among AllianceBernstein’s top stock picks in the country given the recent recovery in the industry. Analysts are overweighting the stock at INR 120 ($1.44), which represents an upside of about 10% from the financial services provider closed on October 11. HDFC Bank also made the list of asset managers thanks to its “tremendous” ability to raise deposits. Analysts are overweighting the stock, giving it an upside of about 36%. Delhivery is another stock favorite, with a target price of INR 460, giving it an upside of around 5%. The logistics company is seen as a “laggard” among consumer technology companies in India and has a “tactical upward trend” amid expectations of stronger profitability and growth, analysts said. New on the Radar The AllianceBernstein portfolio has also undergone an update to include two new stocks: NPTC and Paytm. Power generation company NTPC made the list for its opportunities in thermal and renewable energy and green hydrogen, the analysts wrote. The asset manager is overweight on the stock at INR 274, which represents a ~15% upside from its close on October 11. AllianceBernstein is also positive on digital lending player Paytm. “While it is too early to declare winners in the digital lending space especially with the expected entry of Jio Financial Services, PayTM appears to be on the right side of disruption with its dominant payments platform and head start in digital credit products,” the analysts wrote. The asset manager has an overweight on Paytm and gives it an upside potential of 13.2%. — CNBC’s Michael Bloom contributed to this report.
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