Election Outcome to Swing Indian Equities: A Sector-wise Analysis
PhillipCapital predicts a sharp rally in equities if BJP wins 325+ seats
Indian EquitiesElection OutcomePhillipcapitalCyclicalsReal EstateMetalsCementEnergyFinancialsReal Estate NewsMay 29, 2024
In its base-case scenario, PhillipCapital predicts that if the BJP wins 290-300 seats and the NDA alliance wins 330-340 seats, there could be a sharp rally in the equities market. On the other hand, a bearish scenario, where the BJP does not secure a majority but the NDA forms a government under the leadership of Narendra Modi as PM, might lead to a sharp sell-off in equities.
The brokerage advises investors to buy equities on steep correction, assuming a stable alliance for the next five years under the leadership of Modi. PhillipCapital is confident that there is no chance of a non-NDA government coming to power.
If the NDA comes to power, PhillipCapital remains positive on sectors like automation, EVs, defence, railways, logistics, ports, roads, real estate, metals, cement, energy, and financials. The brokerage has been bullish on cyclicals over consumer space for the past 2.5 years and believes that this trend will continue.
Among its top picks, PhillipCapital recommends stocks like SBI, BOB, Canara Bk, PFC, REC, Shriram Finance, Muthoot Finance, UltraTech, Siemens, Hero MotoCorp, TVS Motor, Divi's Labs, Syngene, APL Apollo, Jindal SAW, IGL, Aarti Industries, Vinati Organics, Praj, Gokaldas Export (NR), and SP Apparel (NR) for a one-year perspective. For a 2-3 year perspective, the brokerage recommends stocks like HDFC Bank, ICICI Bank, SBI, Kotak Bank, Bajaj Finance, Sundaram Finance (NR), MAS Financial (NR), Infosys, HCL Tech, Persistent, KPIT Tech, Rategain, Reliance (NR), GAIL, Ambuja Cements, JK Cement, L&T, Bharti (NR), Sun Pharma, Divi's Labs, Syngene, Coal India (NR), JSW Steel, Jindal Stainless, Maruti, Bharat Forge, Ashok Leyland, Concor, NCC, PNC Infra, Gateway Distriparks, SRF, Aarti Industries, Navin Flourine, PI Industries, Coromandel, Dhanuka Agritech.
PhillipCapital notes that the voter turnout is not a major concern, as the average voter turnout based on the simple average of turnout data released till phase 6 is lower at 65.5% vs 67.4% in the 2019 elections. However, for the same constituencies where voting is completed, the voter turnout is only marginally lower at 66.4% vs. 67.8% in 2019.
The brokerage also notes that the decline in voter turnout is largely unrelated to any single party. For instance, Congress, the second-highest single party in 2019, saw weaker participation in 73% of its 44 constituencies, and YSRCP in Andhra Pradesh saw 55% of its seats seeing lower turnout.
PhillipCapital is a leading brokerage firm that provides investment advice and research services to its clients. The firm has a strong track record of predicting market trends and providing valuable insights to investors.
PhillipCapital is a reputed brokerage firm that offers a range of financial services, including investment advisory, research, and portfolio management. The firm has a team of experienced analysts and experts who provide valuable insights and recommendations to investors.
Frequently Asked Questions
What is the base-case scenario predicted by PhillipCapital?
PhillipCapital predicts that if the BJP wins 290-300 seats and the NDA alliance wins 330-340 seats there could be a sharp rally in the equities market
What is the bearish scenario predicted by PhillipCapital?
A bearish scenario where the BJP does not secure a majority but the NDA forms a government under the leadership of Narendra Modi as PM might lead to a sharp sell-off in equities
Which sectors does PhillipCapital remain positive on?
PhillipCapital remains positive on sectors like automation EVs defence railways logistics ports roads real estate metals cement energy and financials
What is the voter turnout scenario predicted by PhillipCapital?
PhillipCapital notes that the voter turnout is not a major concern as the average voter turnout based on the simple average of turnout data released till phase 6 is lower at 65 5% vs 67 4% in the 2019 elections
What is the brokerage's view on cyclicals vs consumer space?
PhillipCapital has been bullish on cyclicals over consumer space for the past 2 5 years and believes that this trend will continue
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