Stocks on investors’ watchlist based on BJP manifesto

The BJP’s election manifesto, termed ‘Sankalp Patra’ has captured the attention of stock market participants who are assessing possible spaces that could be on the radar over next few months.

The manifesto has promised continuity of key policies along with new measures to deepen India’s economic progress. If the government retains power for a third term, the focus will be on infrastructure expansion, according to the document.

Among the key focus areas are manufacturing, exports, MSMEs, and with in infrastructure, the government is expected to focus on housing, defence, railways, aviation, energy, roads, EVs, among others.

Stocks that should be on your watchlist after BJP’s manifesto launch

Housing: The government has promised to expand the Pradhan Mantri Awas Yojana (PMAY), strengthen the RERA act and facilitate home ownership for middle-income families. This could be positive for Housing and Urban Development Corporation (HUDCO), Major steel players (JSW Steel, Tata Steel), Housing Finance Companies, and Cement players (UltraTech Cement, Ambuja Cement, ACC).

2. Tourism: The manifesto emphasises BJP’s vision to expand the range of programmes on India’s tourism and transform India’s islands into premier global tourism destinations. This is expected to benefit Hotels (Indian Hotels Company and other larger players), Aviation (entire industry) and NBFCs (credit-card players).

3. Railway infrastructure: The manifesto promises to add 5,000+ km of new tracks every year, expand the network of new-age trains and introduce Vande Bharat sleeper trains. It also promises to expand the metro network and feasibility studies for bullet train corridors in north, south and east India. Major steel players such as APL Apollo, JTL, Surya, Hi-Tech are likely to be the key beneficiaries.

4. EVs: The manifesto states BJP’s aim to support the automobile industry and its transition to EV manufacturing. It promises to invest in a nationwide EV charging infrastructure to encourage wider EV adoption. This could be positive for players with reasonable exposure in the EV space like Tata Motors, TVS Motor, and NBFCs such as Shriram Finance, Sundaram Finance and Chola Finance.

5. Suppliers of auto parts:  If BJP delivers on its manifesto promise to develop Bharat as a global manufacturing hub, it will be a huge growth trigger for auto suppliers like Samvardhana Motherson and Sona BLW, who already supply to global OEMs.

6. Mudra loan limit expansion: BJP has promised to expand credit programmes like Mudra and double the Mudra loan limit to Rs 20 lakh for entrepreneurs. This should be positive for the Public Sector Banks, Small Finance Banks and microfinance institutions.

7. Working capital to MSME:  The manifesto lists the use of Digital India infrastructure to create a robust and easy Digital Credit solution to support small traders and MSMEs. This move should be positive for Shriram Finance, MAS Financial Services and Bajaj Finance.

8. Gas connection expansion: The BJP manifesto aims to expand piped natural gas connections to all major cities and towns, which should benefit players like IGL, MGL, Gujarat Gas and Adani Total Gas. This expansion will also be positive for Welspun Corp, Maharashtra Seamless, and Ratnamani Metals. Read more

9: Increase in crop MSP: BJP has ensured an unprecedented increase in MSP for major crops, thus increasing income of farmers, which can be invested for modern farming and agriculture. This is potentially a positive for tractor players such as Escorts Kubota and M&M, and NBFCs like MMFSL, Chola, Shriram Finance and Sundaram Finance.

10. Har Ghar Jal Scheme: The manifesto promises clean drinking water for all households across India. This could be a positive for DI pipes, HSAW pipes, plastic pipe manufacturers. Other likely beneficiaries could be Jindal Saw, Welspun Corp, Electrosteel Castings, Hi-Tech, JTL, Surya and APL Apollo Pipes.

11. Pharma: BJP aims to strengthen India’s position as the ‘Pharmacy of the World’ by boosting manufacturing and research capacities of pharmaceutical sector and APIs. It will expand Research Linked Incentive (RLI) schemes, benefitting CDMO players like Divi’s Lab, Syngene, Suven Pharma and Ami Organics.

12. FMCG (rural recovery): If BJP delivers on its promise to strengthen the PM Fasal Bima Yojana, increase MSP from time to time and support the cultivation of pulses, it could support rural demand recovery. This in turn could benefit players like Dabur, Emami and Bajaj Consumer, HUL, Colgate and Britannia.

13. Dairy: The manifesto states the party’s aim to expand the network of dairy cooperatives, protect cattle from diseases and increase their productivity, which will be modestly negative for private dairy companies (Hatsun Agro, Heritage Food, Dodla Dairy and Parag Milk).

14. PM-eBus: The BJP government launched a scheme PM-eBus Seva to introduce electric buses across cities, offering affordable transport, and intends to further extend it to more cities. This will be positive for e-bus players like Ashok Leyland, Tata Motors, JBM Auto, Olectra Greentech.

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