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Irrespective of who forms government at the Centre, sectors such as FMCG, auto, healthcare, IT services, private banks, and capital goods are expected to perform well, stated brokerage Prabhudas Lilladher in its latest report, 'India Strategy Report - Mandate 2024, Brace of Volatility'.
The brokerage says these sectors are typically defensive hedge against election results. As India completes 4th phase of Lok Sabha elections, debate is on whether NDA will be able to reach its intended target of 400 seats or 'INDIA' bloc making a possible dent to the former's goal. The brokerage in its report said it expects continuation of policy if BJP-led NDA comes back to power and themes around infrastructure, defence, capital goods (CG), new energy, tourism will continue to do well. Consumer, two wheelers and tractors can get a boost from green shoots in rural demand with expectations of normal monsoons. Unexpectedly, if opposition 'INDIA' bloc comes to power, the brokerage believes it will lead to de-rating in overall markets and in specific for sectors like defence, capital goods, tourism, PSUs (including banks), drones, wires and cables, plastic pipes. The brokerage believes that sectors like FMCG, retail, 2W, PV (entry level), tractors, real estate, logistics (E-commerce centric) and consumer durables will benefit from expected policies. Prabhudas Lilladhar in its report has also provided a list of sectors and stocks which will do well irrespective of the regime in power. FMCG: Rural demand revival is expected to get a boost if supplemented by freebies. Key stocks are HUL, Dabur, Emami, Marico, GCPL, Britannia, and Varun Beverages Auto: two wheelers, tractors and entry level cars will benefit. Key stocks: Hero MotoCorp, Maruti and M&M. Healthcare: Sun Pharma, Cipla, Max Health and Jupiter are key stocks IT services: TCS, LTI Mind tree, HCL tech, Cyient, and Tata Tech are key stocks. Private Banks - Expect de-rating of all PSUs including banks. HDFC Bank, Kotak Mahindra Bank, Axis Bank, and ICICI Bank are key stocks. Capital Goods - While many segments in engineering procurement and construction; defence, new energy are at risk, the brokerage house believes global technology leaders like Siemens, ABB, Schneider, Honeywell, Elantas Beck, GE T&D, Hitachi Energy, Timken, Schaffler are likely to suffer much less impact. After two and a half years, Prabhudas Lilladher is "overweight", meaning bullish, on consumer as it increases weight behind HUL, ITC, Britannia and Titan Industries, besides adding Delhivery. The brokerage also turns overweight on auto and adds Hero MotoCorp in model portfolio even as it increases weight on Maruti and M&M. It believes consumer and auto (passenger vehicles, two wheelers and tractors) provide a good hedge as it will benefit from green shoots in rural demand if the current government continues. "The scenario will further improve if INDIA comes to power and doles out freebies to a large section of population," asserted the brokerage house in its report. General elections are being held in seven phases from April 19 to June 1 with votes for the 543 Lok Sabha seats to be counted on June 4. (ANI)
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