Please disable Ad Blocker before you can visit the website !!!
ads
View : 188 Click : 0
thumbnail

Stocks That Can Do Best Under Modi Government

by Abhishek   ·  May 11, 2014   ·  

Stocks That Can Do Best Under Modi Government

by Abhishek   ·  May 11, 2014   ·  

 Election results will be out next week and India is going to have a new government. As indicated by various surveys most probably the new government will be BJP lead government with Narendra Modi as prime minister.  BJP has a good track record in all states its ruling and in the previous rule in the center when it comes to growth.  Below are some of the stocks that can do well if the Narendra Modi government performs as per expectations. 

1. IDFC

BJP has a very good track record when it comes to infrastructure development. Infact out of all highways constructed in the last 30 years, 50% of them where constructed during NDA’s government. The company which will benefit the most from increased funding for infrastructure projects is IDFC(Infrastructure development and finance cooperation). IDFC has also recently got the banking license, which will also contribute to the growth and earning for the company. I believe the stock can give up to 300% return in the next five years on account of stable government under Narendra Modi’s leadership. Technically 90 rs is a strong support level for the stock. Current Price 117

2. Mahindra and Mahindra(M&M)

Mahindra & Mahindra (MM.India), has been able to increase net income despite the stall in the economy. With the improvement in economy the company will benefit a lot. Its SUV Scorpio is the highest selling SUV in the country. Company is the leading manufacturer of tractors in India. It has recently entered in the commercial vehicles and two wheeler segment as well. The company is making entry into military vehicles segment as well.  The stock can easily give you return of 50% in the next couple of years from the current levels. Current price 1097

3. ICICI Bank 

Banks are the backbone of economy. If the economy is good banks will do good otherwise they will be the first to suffer. ICICI Bank , one of the country’s largest private-sector banks is the best bet in the banking sector. You can also bet on SBI, the largest bank of India. But since ICICI has low NPA’s I prefer to go with it. If India’s economy continues to grow above 5%, then you can easily get 20-30% annualized returns from ICICI Bank. 2000 looks like an easily achievable target in the next couple of year. Current price 1384

4. GPPL

To improve the economy it is necessary to increase the exports. Exports take place mainly through ports. India is creating a dedicated freight corridor that tackles the country’s dilapidated infrastructure. Shipping and logistics firm Gujarat Pipavav Port is the best in the sector to invest. Currently the stock is trading at 90 levels and it has the potential to multiply in the coming years. Current price 100

5. Shriram Transport Finance (SRTR India)

Transportation is the vital part of any economy. In India most of the goods transportation takes place through trucks. Shriram Transport Finance is the country’s biggest commercial vehicle lender, trades at a discount and has a stronger balance sheet than many of its peers. This company will gain a lot from economic growth. The stock can appreciate 50% in the next couple of years. Current price 768 

6. TVS Motors

Two wheeler segment is a consistently growing sector in the country. The safe and best pick would be bajaj auto in the sector but I would like go with TVS because it has recently tie up BMW for the manufacturing of high end bikes. This can re rate the stock and can turn around the whole company. Currently the stock is at 100 levels and it can easily multiply in the coming years if all goes well. Current Price 106 

7. Tata Steel 

Infrastructure could not be build with steel. Tata steel is the largest and low cost steel producer in the country. The stock is still very cheap and is trading at nearly one third of its all time high price. Currently at 400 levels can easily test 600-700 levels in the coming years. Current Price 420 

8. UltraTech Cement

Cement is another required thing for building infrastructure. Ultra tech is the countries largest cement producing company. You can get good annualized returns of 20-30% Current Price  2070 

9 Reliance Power

The stock has been an under performer since it got listed in the market. Power sector will be on focus on Modi government. Reliance power is has many ultra power plants. After the fuel supply issues gets solved this stock can move like rocket. Limited investment should be made in this stock as its highly volatile. Current Price 72 

stocks to buy modi

Disclaimer: All the above stocks are recommended on the expecation of good stable government. Performance of stocks will depend on the policies of new government. Kindly consult your financial advisory before investing.  Some of the stocks discussed here have been recommended to clients.

2 Comments

  1. Debashis Lahiri

    Dear Mr Shukla,
    I have a buy in JP Assoc @ 72.75, and PTC @98 & 90. These are positional holdings, for the short to medium term.
    I intend to buy more, if price declines, obviously I need to give MTM and initial margin to purchase additional lots.
    My booking strategy is : if price rises, I book the ongoing lot at the cost price of the next lot. Examole : If PTC taken at 90 rises, I shall book it at 99. In the event it falls, I buy 1 more at the next strong support level after giving a gap. Thus with the help of multiple pricepoints I create separate individual compartments and operate at the pricepoints which is the entry or exit of that compartment.
    My question to you is : in the worst of circumstsnces, say if nifty corrects by 10%, what downside can JP Assoc & PTC might come down to ? Do you see JP Assoc & PTC as prospective stocks going forward ? Do you suggest any change ? What is your opinion on IDFC & its downside risk in case markets correct significantly ?

    Thanks & Regards
    Mr. D. Lahiri
    9830248377

  2. Abhishek Shukla

    PTC is fundamentally a very good stock you can accumalate at all declines and it can give your 20-40% return in a year. JP is not so good fundamentally , technically 50 rs looks the strong support which can be considered as maximum downfall for now

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.