Kotak Model Portfolio Update: Key Adds, Cuts in 2025

What changed and why it matters

Kotak Institutional Equities has revised its recommended model portfolio, raising exposure to select companies it sees benefiting from sector tailwinds while cutting names where it sees weaker execution or less attractive risk-reward. The changes span financials, consumer and industrial names, and come alongside broader rebalancing activity seen across domestic institutional portfolios. In parallel, there were also model-portfolio changes referenced from Jefferies, and a separate discussion on why Kotak stopped publishing a mid-cap model portfolio it used to run.

The update is being framed as a shift toward what the brokerage described as “better stocks” and away from “narrative stocks.” The actual moves include a mix of additions, weight increases, trims, and outright exits.

Additions: Dixon Technologies and Aadhar Housing Finance

Kotak added Dixon Technologies to its model portfolio with a 150 basis point allocation. The stated rationale was long-term growth drivers, even though the stock had seen recent share-price weakness.

It also added Aadhar Housing Finance with a 150 basis point weight. Kotak pointed to “reasonable valuations” and steady growth prospects as the basis for the inclusion.

These two adds indicate a preference for companies where Kotak believes the long-term setup remains intact, even if near-term market pricing has been volatile.

IndiGo and Pidilite: weights raised after stock-specific moves

Kotak increased its weight on InterGlobe Aviation (IndiGo) after the stock corrected around 15% over the past month on concerns about short-term earnings risks from operational disruptions. One referenced change was an increase of 50 basis points to 180 basis points.

In another referenced model-portfolio update, Kotak raised its allocation to IndiGo by 100 basis points to 2.5% and increased Pidilite Industries by 40 basis points to 1.9%. The material point across the references is that IndiGo’s weight was raised following a correction, and Pidilite’s weight was also increased.

Financials shuffle: IndusInd out, Bajaj Finance and Eternal in

A separate set of recommendations described three moves, including removing IndusInd Bank from the model portfolio. The weight taken out of IndusInd Bank was redistributed into Bajaj Finance and Eternal.

While the excerpt flags “the case for upside” for Bajaj Finance, it does not provide further quantitative detail in the provided text. Still, the change is clearly positioned as a reallocation within financial exposure.

Trims and exits: Torrent Pharma, Dabur, Airtel and Reliance

Kotak removed Torrent Pharmaceuticals from the portfolio, noting the stock has performed well over the past 12 to 36 months and that it sees “better opportunities elsewhere” at current valuations.

It also trimmed weights on Bharti Airtel and Reliance Industries as part of a broader rebalancing exercise, while increasing its allocation to Mahindra and Mahindra.

Separately, Kotak cut Dabur by 140 basis points and removed it from the model portfolio.

Another large-cap move: SRF removed on near-term risks

From the recommended large-cap portfolio, Kotak removed SRF due to what it described as near-term downside risks to revenue and earnings. The brokerage said SRF appears reasonably valued, but highlighted growing earnings risks tied to a likely sharper-than-expected global slowdown, a prolonged slump in global demand for chemicals, and related pricing pressure.

Kotak reallocated SRF’s weight to HDFC Bank, ICICI Bank, and Reliance Industries.

Kotak’s ratings actions and stated fair values

Kotak also revised ratings on several industrial names in the provided material. It upgraded Carborundum Universal and Praj Industries to ‘buy’, and upgraded ABB India and Thermax to ‘add’ (from reduce). Siemens was moved to a ‘reduce’ rating, with Kotak citing risk from an upcoming demerger and a potential change in license fee or royalty terms as promoters change hands in the demerged entities.

Kotak maintained its ‘buy’ call on Cummins India, ‘reduce’ on Larsen and Toubro (L&T), and ‘sell’ on CG Power.

Model portfolio snapshot: additions, exits and weight changes

The following table captures the explicit model-portfolio changes and weights mentioned in the provided text.

Mutual fund rebalancing: exits in industrials and selective adds

Alongside brokerage model-portfolio changes, the provided text also points to mutual funds trimming or exiting positions in a wide set of companies including Siemens Energy India, ABB India, PNB Housing Finance, PG Electroplast, Suzlon Energy, Hindalco, Shriram Finance, BSE, Divi’s Laboratories, SBI Cards, Eicher Motors and Prestige Estates.

Funds also pared stakes in Maruti Suzuki, Cummins India and Hindustan Unilever. At the same time, the text notes increased exposure to One97 Communications (Paytm), Hero MotoCorp, Tata Communications, Swiggy and Coforge, while trimming stakes in Cummins India, Hitachi Energy India, Fortis Healthcare, GE Vernova T&D and Muthoot Finance.

Jefferies’ Chris Wood: HDFC Bank and Siemens India added

The provided material also describes changes in Jefferies’ model portfolios. Chris Wood reintroduced HDFC Bank with a 4% weight in an Asia ex-Japan long-only portfolio, funded by reducing weights in Macrotech Developers, L&T, ICICI Bank and Axis Bank by 1 percentage point each.

It also mentions adding Siemens India with a 4% weight in the same basket. In the India long-only portfolio, HDFC Bank was introduced with a 1% weight, funded by a reduction in Axis Bank, and AU Small Finance Bank’s weight was cut.

Why Kotak stopped a mid-cap model portfolio, but not coverage

Sanjeev Prasad, Head of Research at Kotak Institutional Equities, said the firm has not stopped coverage of mid-cap stocks, but has dropped a 15-stock model portfolio he used to run. He said many of the stocks in that portfolio had moved above Kotak’s fair values after a strong run, and that it would be irresponsible to recommend stocks where fair value is lower than the current market price.

A Reuters report also stated that Kotak ceased its recommendations for Indian mid-cap firms, citing a lack of stocks (outside a select few financials) with potential for growth after the mid-cap index’s sharp rally.

Market impact and what investors can take away

These changes matter for investors mainly because they show how one large domestic brokerage is positioning across financials, consumption, industrials, and transport. The explicit actions show preference for names where Kotak sees valuation comfort (Aadhar Housing), long-term drivers despite recent weakness (Dixon), and a post-correction entry point (IndiGo).

At the same time, the exits and trims show valuation discipline in stocks that have done well over longer windows (Torrent Pharma), and a willingness to cut exposure where near-term revenue and earnings risks are highlighted (SRF). The surrounding mutual fund rebalancing list adds another layer: institutional flows are actively rotating, with visible trims and exits across industrial and financial names.

Conclusion

Kotak’s latest model-portfolio changes combine fresh additions, higher weights in select names, and exits in others, with the common thread being valuation and execution comfort. Separately, the firm’s explanation on dropping a mid-cap model portfolio underscores the role fair values play in published recommendations. Investors tracking these updates will likely watch for further portfolio notes and rating actions as market narratives shift and stocks move closer to, or away from, stated fair values.