TCS, Axis Bank, HUL and more: Top 30 stocks expected to do well irrespective of Lok Sabha election results

As the 2024 Lok Sabha election approaches, market analysts are keenly observing its potential impact on the Indian stock market. Prabhudas Lilladher, a leading brokerage firm, suggests that certain sectors and stocks may perform well regardless of the election outcome, providing a hedge against market volatility. Here's a summary of their insights and recommendations.

Sectors Expected to Perform Well

Prabhudas Lilladher identifies sectors like FMCG, Auto, Healthcare, IT Services, Private Banks, and Capital Goods as stable investment options. These sectors are considered resilient to political changes and are expected to provide a defensive hedge against market fluctuations post-election.

Market Scenarios and Impacts

If NDA (Modi) Wins:

Continuation of existing policies is expected.

Sectors like Infrastructure, Defence, Capital Goods, New Energy, and Tourism are likely to thrive.

Rural demand may boost Consumer Goods, Two-Wheelers, and Tractors, especially if supported by favorable monsoon conditions.

If INDIA Alliance Wins:

A market de-rating could occur, similar to the reaction in 2004, where Sensex dropped by 15%.

Sectors such as Defence, Capital Goods, Tourism, PSUs (including Banks), Drones, AMC, Wires and Cables, Plastic Pipes, and EMS might face negative impacts.

However, sectors like FMCG, Retail, Two-Wheelers, Entry-Level Passenger Vehicles, Tractors, Real Estate, Logistics (E-commerce centric), and Consumer Durables could benefit from anticipated policy changes.

Sector-wise Stock Recommendations

FMCG: Revival in rural demand could be boosted by policy support.

Key Stocks: HUL, Dabur, Emami, Marico, GCPL, Britannia, Varun Beverages

Auto: Favorable conditions for Two-Wheelers, Tractors, and entry-level cars.

Key Stocks: Hero MotoCorp, Maruti Suzuki, M&M

Healthcare: Considered a defensive sector.

Key Stocks: Sun Pharma, Cipla, Max Health, Jupiter

IT Services: Minimal impact from domestic politics due to global market orientation.

Key Stocks: TCS, LTI Mindtree, HCL Tech, Cyient, Tata Tech

Private Banks: Likely to remain stable compared to public sector banks.

Key Stocks: HDFC Bank, Kotak Mahindra Bank, Axis Bank, ICICI Bank

Capital Goods: Global technology leaders in this sector are expected to be less impacted.

Key Stocks: Siemens, ABB, Schneider, Honeywell, Elantas Beck, GE T&D, Hitachi Energy, Timken, Schaeffler

Conclusion

Investors are advised to consider these sector-wise recommendations to mitigate risks associated with the uncertain political landscape. While these stocks are identified for their resilience, consulting with certified financial experts before making investment decisions is crucial.

(Disclaimer: The views and recommendations made above are those of individual analysts or broking companies and not of Mint. Investors should check with certified experts before making any investment decisions.)