A majority of exit polls for Lok Sabha election 2019 announced yesterday indicate the National Democratic Alliance (NDA) is coming back to power. This could bode well for the markets which hope for a stable government at the Centre. Here's a look at sectors and stocks which are likely to benefit today after exit polls predicted Modi government would return to power on May 23.
Bharatiya Janata Party (BJP) in its manifesto announced on April 8 this year that it would give a push to improve the productivity of farm sector in the country. The party will launch a pension scheme for small and marginal farmers aged over 60 years and spend Rs 25 lakh crore to improve the productivity of farm sector among others announcements. The Modi government's return to power is likely to propel agriculture sector stocks.
Rashtriya Chemicals and Fertilisers, Rallis India, Monsanto, United Phosphorus, Jain Irrigation, Advanta, PI Industries, Excel Crop Care, M&M and Tata Chemicals are some stocks which are likely to rise on Monday after win of Modi-led BJP in exit polls.
BJP government's main focus during the last five years has been on developing the infrastructure sector. In its 2019 election manifesto too, the government said it would make capital investment of Rs 100 lakh crore by 2024 in the infrastructure sector and announce a new industrial policy to improve competitiveness of manufacturing and services.
Stocks such as KNR Construction, IRB Infrastructure, Sadhbhav Engineering, Ashoka Buildcon, Jaypee Infratech, SORIL Holdings, SORIL Infra Resource, SKIL Infrastructure, ARSS Infra, NCC, ABB India, KNR Construction, Cummins India and HG Infra Engineering are likely to gain if exit polls signal Modi government's return.
The Modi government's focus on power sector led to a significant improvement in energy deficit situation during its four years of tenure. India's energy deficit, which remained rangebound between 8% and 10% between during 2011-13, improved in FY14 to 4-4.5%, and subsequently contracted to 0.7%, a Care Ratings report said.
"The improvement could be attributed to rapid addition in thermal capacity in the private sector, which led to increase in electricity production," the report on four years of economic performance of the Narendra Modi government said. "This indicates improvement in electricity evacuation and power distribution infrastructure," it added.
Power Finance Corporation, Rattan India Power, Ratan Infra and KSK Energy, Adani Power, NTPC, Tata Power, NHPC and Power Grid Corporation are some stocks which are likely to rise after the outcome of exit polls.
Auto sector which has seen slowdown in sales of late will be a key sector to watch out for after exit polls indicated Modi government is returning to power. Modi government's poll sops for the farm sector will leave more money in the hands of farmers which will be spent on buying tractors, cars and two wheelers in the rural market.
This will in turn propel sentiments for auto stocks to new highs. Hero MotoCorp, Maruti, Tata Motors and M&M are some stocks which are likely to see a rally when market reopens on Monday.
Banking sector stocks are also likely to rise since sales in auto sector, demand for housing loans and agriculture loans will lead to a rise in their loan books. Also, banking stocks have been at the forefront of almost all rallies on the benchmark indices. Some banking stocks which may lead the rally are Kotak Mahindra Bank, Bank of Baroda, ICICI Bank, Axis Bank and SBI among others.