Jefferies reshuffles India model portfolio

Jefferies has made four additions to its India model portfolio — Manappuram Finance, Hindustan Zinc, Meesho, and Navin Fluorine — while trimming exposure to Bajaj Finance and Jindal Stainless, according to a brokerage report.

The portfolio moves are funded by reductions in the latter two namesgang, but Jefferies noted that none of the three stocks that lost weight — including Ambuja Cements, which was removed outright — have been downgraded. All continue to carry a Buy rating, with the changes described as portfolio-construction decisions rather than changes in conviction on the underlying companies.

Gold monetisation thesis drives additions

Jefferies named Manappuram Finance as its preferred play on the accelerating monetisation of household gold through formal lending channels. The brokerage estimates that household gold holdings in India were worth close to 9 trillion as of March 2026, up from about 9 trillion two years earlier, as gold prices sustained levels above $4,000 an ounce for roughly a year.

That wealth is increasingly being pledged rather than held idle, Jefferies said. Organised gold-loan books have grown 73% over two years to an estimated $197 billion, accounting for about 7% of total bank and non-bank credit. The brokerage calculates that the jump in gold-loan assets under management added roughly 130 basis points to GDP in the fiscal year. Yet it estimates that only about 15% of household gold is currently monetised through formal channels, leaving significant headroom for growth.

Jefferies also highlighted that gold loans as a share of gold holdings have not kept pace with the rise in gold prices, suggesting scope for further monetisation. A return to the pre-2020 ratio of about 1% of gold holdings being monetised would represent a meaningful increase from current levels, the report said.

New additions and their rationale

  • Manappuram Finance — Jefferies' preferred name to benefit from gold-loan monetisation, as the company focuses on lending against household gold.
  • Hindustan Zinc — Added to gain exposure to the silver theme, replacing Jindal Stainless in the portfolio.
  • Meesho — A play on mass-market discretionary consumption, expected to benefit from increased household liquidity as gold is monetised.
  • Navin Fluorine — Added on expectations of growth across its CDMO, specialty chemicals, and cooling products businesses, with Jefferies forecasting 23% EPS CAGR through FY26-29.

Other potential beneficiaries

The report also identified jewellers Titan and Kalyan Jewellers, commodity exchange MCX, and non-bank lenders IIFL Finance and Muthoot Finance as potential beneficiaries of the gold monetisation trend, though none were added to the model portfolio.

Jefferies' macro strategist Chris Wood has previously highlighted gold as a hedge against fiscal and monetary pressures. The brokerage notes that rising gold prices and increased monetisation could support consumption and credit growth in the economy.

Broader market context

The portfolio changes come as Indian equities see increased interest in financials, metals, and consumption themes. Jefferies' move to add Hindustan Zinc reflects a view on silver, a by-product of zinc mining, while the addition of Meesho targets mass-market discretionary spending.

Navin Fluorine's inclusion is based on growth levers across its CDMO, cooling, and specialty chemicals businesses, with Jefferies expecting 23% EPS CAGR through FY26-29.

The report identified additional beneficiaries of higher gold prices — jewellers Titan and Kalyan, commodity exchange MCX, and lenders IIFL Finance and Muthoot Finance — though these were not added to the model portfolio.

Macro backdrop

Jefferies macro strategist Chris Wood has previously argued that fiscal pressures in the US and Japan are constraining monetary policy, which he sees as bullish for gold