Stocks Poised to Benefit from a Modi 3.0 Government
As exit polls indicate a decisive victory for the Modi BJP-led NDA coalition in the 18th Lok Sabha elections, analysts from various brokerage firms have highlighted a range of stocks likely to benefit from the potential formation of a Modi 3.0 government. The average of all major exit polls suggests that the BJP-led NDA will secure 374 seats, while the INDIA alliance may get 137 seats, and other parties may get 30 seats.
According to different surveys, today’s Chanakya survey suggests that the NDA could secure up to 400 seats. India Today-Axis predicts the NDA will secure between 361 and 401 seats, while India TV-CNX forecasts a range of 371 to 401 seats. Even the most conservative estimates, from News Nation and TV 9 Bharatvarsh-Polstrat, predict 342 seats for the NDA, well above the majority threshold of 272 seats.
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If these exit polls are accurate, “Modi stocks” could experience a rally, as many analysts have predicted. These are companies and sectors that have benefited from policies and initiatives implemented under the leadership of Prime Minister Narendra Modi. Investors find these stocks particularly attractive due to the growth driven by government policies.
Key Beneficiaries of Modi Stocks
Defense and Manufacturing
- Companies: HAL, Hindustan Copper, NALCO, Bharat Electronics, Cummins India, Siemens, ABB India, SAIL, BHEL, Bharat Forge
Infrastructure and Transport
- Companies:The companies include Indus Towers, GMR Airports, IRCTC, and Container Corporation of India.
Power and Energy
- Companies: NTPC, NHPC, PFC, REC, Tata Power, HPCL, GAIL, JSPL, Power Grid Corporation, ONGC, Coal India, Petronet LNG, BPCL, IOCL
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Banking and Finance
- Companies: SBI, PNB, Canara Bank, Bank of Baroda
Telecom
- Companies: Bharti Airtel, Vodafone Idea, Indus Towers
Other Beneficiaries
- Companies: Adani Ports, Ambuja Cements, ACC, Indian Hotels, Reliance Industries, L&T, UltraTech Cement, Shree Cement, The India Cements, Dalmia Bharat, The Ramco Cements
Analyst Recommendations
CLSA, a global brokerage firm, has identified 54 companies as direct beneficiaries of Modi’s policies, with half of them being public sector undertakings (PSUs). Among these, analysts favor stocks such as L&T, NTPC, NHPC, PFC, ONGC, IGL, MGL, Bharti Airtel, Indus Towers, and Reliance.
Amar Ambani, an Executive Director at YES Securities, has recommended several stocks for investors to consider before the 18th Lok Sabha election results on June 4th. These stocks, including NTPC, Texmaco Rail & Engineering (Texrail), SBI, GMR Airports Infrastructure, and Bharti Airtel, have the potential to generate returns of up to 26% for investors.
Previously, Phillip Capital, another brokerage firm, identified 21 stocks that could potentially increase investors’ wealth over the next year, assuming the BJP maintains power with 290-300 seats in the Lok Sabha election. The top picks from Phillip Capital include:
- Banking and Finance: In the banking and finance sector, the companies include SBI, BoB, Canara Bank, PFC, REC, Shriram Finance, and Muthoot Finance.
- Infrastructure and Manufacturing: UltraTech, Siemens
- Automotive: Hero MotoCorp, TVS Motor
- Pharmaceuticals: Divi’s Labs, Syngene
- Others: APL Apollo, Jindal SAW, IGL, Aarti Industries, Vinati Organics, Praj, Gokaldas Export, SP Apparel
Conclusion
The exit polls suggest a strong mandate for the BJP-led NDA, which, if accurate, could lead to a significant rally in stocks that have previously benefited from Modi’s policies. Investors should consider these stocks for potential gains driven by continued governmental support and policy initiatives.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. FINOSTRY suggests its readers/audience to consult their financial advisors before making any money related decisions.)