Series 117 – Concentration with Conviction: Itus’s Strategic Portfolio Shift

At Itus Capital, we continuously adapt to the changing market environment—recalibrating portfolios not just by sector, but by the quality and durability of underlying businesses. Over the past 12 months, we have observed a meaningful shift in our portfolio construct, driven by changing earnings patterns and narrowing growth leadership.

While the last three years saw broad-based earnings recovery across large, mid, and small caps, we believe earnings are now concentrating in a smaller set of companies with pricing power and sustainable moats—driven by distribution, technology, or operational edge. This is reflected in our portfolio changes between June 2024 and June 2025: the number of stocks reduced from 39 to 31, and allocation to the top three sectors rose from 55% to 70%.

Sectorally, our allocation to Financials increased significantly from 11% to 36%, while Banking exposure rose from 4.5% to 21.5%. This underlines our internal shift—from broader sector exposure to more selective plays within sectors, where capital efficiency, profitability, and market structure offer higher conviction. We anticipate this cycle will continue to reward such concentrated quality.

This strategic tilt is aligned with our ongoing efforts to navigate cycles with conviction. As mentioned in our Q2 Itus Quarterly Market Perspective, we foresee narrow earnings growth in the short term, with a potential capex-led cycle emerging by December and incremental demand from the Pay Commission in January 2026. At Itus Capital, our research-led and flexible approach helps us stay ahead of these shifts, enabling long-term wealth creation.

Keep following us for more such insights. As always, we reiterate the value of investing through SIPs to average across cycles. Do connect with your relationship manager to explore our SIP Program tailored to your goals

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Weekly Enlightenment Archives – ITUS Capital