After a period of uncertainty surrounding the elections, the National Democratic Alliance (NDA) government is now in place with the support of around 300 members of Parliament. Analysts are closely watching the success of the Bharatiya Janata Party (BJP) and Prime Minister Narendra Modi in running an alliance government, as continuity in key ministries is seen as a positive sign.
Amnish Aggarwal, Director of Research at Prabhudas Lilladher, expects the NDA government to maintain its focus on capital expenditure-led growth in sectors such as PLI, Roads, Ports, Aviation, Defence, Railways, and Green energy. This expectation is supported by a 20 bps lower fiscal deficit in FY24, normal monsoons, and a dividend of ₹2.1 lakh crore from the Reserve Bank of India (RBI).
Aggarwal also anticipates an increased focus on Farmers, Rural, urban poor, and the middle class to counter the impact of recent social engineering and freebies-led reversals in certain states. He remains positive on sectors such as Auto, Banks, AMCs, Capital Goods, Defence, Hospitals, Pharma, Cement, Aviation, and Discretionary consumption.
In the fourth quarter of FY24, certain sectors saw significant beats in sales and EBITDA, while others fell below estimates. The market strategy report by Prabhudas Lilladher highlights the performance of various industries during this period.
The Nifty 50 is currently trading at 19.2x 1-year forward EPS, in line with its 15-year average. The brokerage firm values Nifty at different PEs in its base, bull, and bear cases, with corresponding targets for the index.
In its Model Portfolio, Prabhudas Lilladher has made adjustments to weights on various stocks, adding and removing certain companies based on their outlook. The brokerage firm is overweight on certain sectors and underweight on others, with equal weight on cement.
Additionally, the firm has updated its High Conviction Picks, adding and removing stocks based on their potential for strong performance in the current market environment.
Investors are advised to consult with certified experts before making any investment decisions, as the views and recommendations mentioned are those of individual analysts or broking companies.
As the NDA government settles in and market dynamics continue to evolve, it will be interesting to see how these predictions and strategies play out in the coming months. Stay tuned for more updates on business news, market events, and breaking news on Live Mint.
