** Jefferies says HomeCo Daily Needs REIT's HDN.AX December valuations showed strong LFL gains of 3% and 5 basis points of cap rate tightening

** Brokerage sees scope for a potential upgrade at the February results

** Adds, the market likely expected a punchier headline given the strong tailwinds behind convenience retail

** Margin gains from refinancing ~44% of drawn debt are being eroded by base-rate moves since August results - Jefferies

** Stock up 20.1% YTD

(Reporting by Kumar Tanishk in Bengaluru)

((Tanishk.Kumar@thomsonreuters.com; X: @thatstanishk http://www.x.com/thatstanishk;))