The 2024 BJP manifesto emphasized broad-based development through government initiatives with socio-economic impacts. Key priorities include infrastructure development, making India a global manufacturing hub, and focusing on Capex.
The BJP aims to strengthen digital and physical infrastructure, empower MSMEs, and provide piped natural gas connections to major cities and towns.
Further, the manifesto emphasized maintaining policy consistency, enhancing implementation processes, and broadening the scope of existing priorities such as Housing, Ayushman Bharat, and Infrastructure.
According to Motilal Oswal Securities, the BJP aims to establish India as a prominent manufacturing center in sectors like Electronics, defence, Aviation, Railways, and Renewable Energy. This vision entails bolstering both digital and physical infrastructure while fostering the growth of MSMEs.
Investor optimism soared following the release of Saturday’s exit polls, propelling Indian equity benchmark indices to unprecedented heights on Monday. The Nifty 50 surged by 3.58 percent (807.20 points) to 23,337.70, while the Sensex climbed 3.55 percent (2,621.98 points) to reach 76,583.30.
Forecasts suggest that the NDA could secure between 355 and 380 seats out of the 543 seats in the Lok Sabha. Six exit polls, including those conducted by Republic Bharat-P Marq (359 seats), India News-D-Dyanamics (371 seats), Republic Bharat-Matrize (353-368 seats), Dainik Bhaskar (281-350 seats), News Nation (342-378 seats), and Jan Ki Baat (362-392 seats), all indicate a decisive lead for the BJP-led NDA.
Brokers are expressing varied perspectives and opinions on the Indian market, particularly in anticipation of a stable government formed by the NDA.
Nomura says the equity market will react positively if the exit poll results translate to actual results. . Additionally, it suggests that Foreign Institutional Investor (FII) flows could see enhancement if the NDA secures a stable government, as projected. Nomura further highlights expectations for the infrastructure and manufacturing sectors to exhibit strong performance in the short term.
On the other hand, Kotak Institutional Equities predicts a government emphasis on growth fueled by investments. It also observes that many sectors and stocks appear overvalued compared to their fair value.
Jeffries highlights that the exit poll figures surpass initial projections, suggesting a potentially upbeat sentiment for capex stocks should the final results align with these numbers.
According to IIFL Securities, ahead of the 2024 Lok Sabha elections, they anticipate increased focus on the power sector, agriculture, infrastructure, cement, as well as private banks and NBFCs.
Here are some key sectors to focus following the post-2024 LokSabha results
Power Sector
Motilal Oswal remains optimistic about the power sector. India targets 500 GW of renewable energy capacity by 2030. The Ministry of Power’s draft National Electricity Plan proposes a ₹4.75 lakh crore investment in transmission upgrades by 2027 and aims to install 51.5 GW of battery storage by 2030 for continuous power supply.
Infrastructure sector
Motilal Oswal remains optimistic about the infrastructure sector. Since 2014, the national highway network has expanded by 60%, growing from 91,287 km to 146,145 km by the end of 2023. Under the Bharatmala Pariyojana Phase I, 34,800 km of national highways will be developed by 2027-2028.
Additionally, the government plans to construct 22 new greenfield expressways and expand the number of airports to 220 by 2030.
Defence sector
According to a report by Motilal Oswal, the government has issued four ‘Positive Indigenisation Lists’ to cut import dependency and boost domestic production, including 411 service-related items and three sub-lists for Defence Public Sector Undertakings (DPSUs), resulting in about 3,783 locally manufactured items.
The Indian government aims to double defence exports to Rs 50,000 crore by 2028-29, striving for self-reliance and increased domestic procurement in the defence sector.
Railway sector
According to a Motilal Oswal report, Indian Railways’ capital expenditures could rise substantially. The government may focus on modernizing existing trains with new amenities and introducing several new trains on popular routes.
The BJP government showed its commitment to railways in the last budget by allocating Rs 2.40 lakh crore for capital expenditure, nine times the amount allocated by the UPA government in the 2013-14 fiscal year.
PSU Banks
According to a Motilal Oswal report, the government has consistently been concerned about the increase in NPAs and bad loans in PSU banks.
Since the BJP came to power, several major banks have merged to improve capital adequacy ratios (CARs) and overall banking sector health.
Ethanol sector
Motilal Oswal remains optimistic on the ethanol sector, Since the government has launched the Ethanol Blended Petrol (EBP) Programme to boost ethanol production. This initiative aims to enhance energy security, reduce fuel imports, save foreign exchange, protect the environment, and support the agriculture sector.
The National Policy on Biofuels sets ambitious targets to increase domestic bioethanol production and decrease reliance on foreign oil, aiming for a 20% blending rate by 2025. To achieve this, India is providing support and subsidies for setting up and expanding distilleries.
Real Estate sector
Motilal Oswal remains optimistic about the real estate sector. The government is considering granting the sector industry status and plans to establish a single-window clearance system to ease business and build trust between developers and state authorities.
The Union Budget 2023-24 has significantly increased funding for the Pradhan Mantri Awas Yojana (PMAY) by 66%, raising the total to Rs 79,000 crores. The PMAY scheme aims to provide affordable housing to the urban and rural poor, with a goal of 5 crore houses
Written by Omkar Chitnis
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