Stocks to invest after Lok Sabha Elections 2024 results: Report
Mumbai: As all eyes are set on the final results of Lok Sabha elections 2024, market strategists are working on investment plans for investors in the light of likely outcomes.
Exit polls point to a significant victory for the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA), triggering a short-term rally in the markets, however trends reflect predictions that put too much confidence in the ruling BJP-led NDA’s win.
According to a Business Standard report, citing Elara Capital, foreign institutional investors (FIIs), who had withdrawn funds from the market in the lead-up to the elections, will now take up a bullish stance and bring back the momentum in the market.
Despite this positive outlook, foreign institutional investors (FIIs) are predominantly neutral to underweight in various sectors, although there are some exceptions in financials and consumer staples, according to the report.
Looking ahead of the initial excitement over the elections, Elara Capital advises investors to proceed with caution and adopt a discerning approach while adapting to the changing environment, the Business Standard reported.
Despite India's markets showing remarkable performance in FY24, with a 36% earnings growth in the BSE200 universe, expectations for FY25 need to be adjusted. The likely slowdown in earnings growth in future, combined with global macroeconomic conditions, underscores the need for a nuanced investment strategy, stated the report.
According to Elara Capital, the key sectors to watch are banking, real estate sector, automobiles, metals and mining, and consumer staples.
The companies of interest can be Maruti Suzuki, Mahindra & Mahindra, Bajaj Auto, and TVS Motors, large PSU banks, private sector banks like ICICI Bank and Axis Bank, Godrej Consumer Products, Marico, and Mrs. Bectors, according to the report.
On mid and small-cap stocks, Elara Capital’s Garima Kapoor was quoted as saying by Business Standard, “We remain positive on Mid & Smallcap spaces due to benefits from government-led capex, but high valuations suggest a selective approach post-elections. Favorable conditions like the RBI’s dividend payment and likely reduced borrowing suggest lower market rates, benefiting Real Estate, Banks, and Autos. Global trends support metals and data centers, while La Niña should boost rural and agriculture sectors."
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