Exit polls are suggesting a clear majority win for the BJP-led NDA coalition in the 18th Lok Sabha elections. Analysts from various brokerage houses have identified a range of stocks that could benefit if a Modi 3.0 government is formed.
After the 7th phase of elections on Saturday, almost all exit polls indicate a BJP win on June 4. The average of major exit polls predicts that the BJP-led NDA will secure 374 seats, while the INDIA alliance may get 137 seats, and others may get 30 seats.
The survey by Today’s Chanakya suggests the NDA could reach 400 seats. India Today-Axis predicts 361-401 seats, and India TV-CNX forecasts 371-401 seats. Even the lowest prediction from News Nation and TV 9 Bharatvarsh-Polstrat gives the NDA 342 seats, well above the majority threshold of 272 seats.
If these exit polls are correct, “Modi stocks” could see a rally. These are stocks of companies that have directly benefited from government policies under Prime Minister Narendra Modi. Global brokerage CLSA has identified 54 companies that are seen as direct beneficiaries of Modi’s policies, half of which are PSUs. These include:
Defense & Manufacturing: HAL, Hindustan Copper, NALCO, Bharat Electronics, Cummins India, Siemens, ABB India, SAIL, BHEL, Bharat Forge
Infrastructure & Transport: Indus Towers, GMR Airports, IRCTC, Container Corporation of India
Power & Energy: NTPC, NHPC, PFC, REC, Tata Power, HPCL, GAIL, JSPL, Power Grid Corporation, ONGC, Coal India, Petronet LNG, BPCL, IOCL
Banking & Finance: SBI, PNB, Canara Bank, Bank of Baroda
Telecom: Bharti Airtel, Vodafone Idea, Indus Towers
Others: Adani Ports, Ambuja Cements, ACC, Indian Hotels, Reliance Industries, L&T, UltraTech Cement, Shree Cement, The India Cements, Dalmia Bharat, The Ramco Cements
Among these, CLSA analysts prefer L&T, NTPC, NHPC, PFC, ONGC, IGL, MGL, Bharti Airtel, Indus Towers, and Reliance.
Meanwhile, Amar Ambani, Executive Director of YES Securities, suggests buying stocks like NTPC, Texmaco Rail & Engineering (Texrail), SBI, GMR Airports Infrastructure, and Bharti Airtel, which could yield potential returns of up to 26%.
Assuming the BJP retains power with 290-300 seats, brokerage firm Phillip Capital listed 21 stocks that could make investors richer in the next year. Their top picks are:
Banking & Finance: SBI, BoB, Canara Bank, PFC, REC, Shriram Finance, Muthoot Finance
Industrials: UltraTech, Siemens, Hero MotoCorp, TVS Motor, Divi’s Labs, Syngene, APL Apollo, Jindal SAW, IGL
Chemicals & Exports: Aarti Industries, Vinati Organics, Praj, Gokaldas Export, SP Apparel
Analysts from JM Financial recommend large-cap stocks due to their valuation comfort. They favor private banks and the consumption sector, and suggest that any market dips should be bought into, expecting policy continuity.
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