Tata Motors, Dabur, Bajaj Finance among stocks that can benefit if PM Modi gets third term, says Phillip Capital

After PM Modi unveiled the Bharatiya Janata Party's (BJP) Manifesto "Sankalp Patra" for the upcoming Lok Sabha Elections of 2024, brokerage Phillip Capital said some sectors that can benefit include automobiles, cement, metals (pipes), real estate, alternative fuels among others.

Phillip Capital's recent report states that the BJP's manifesto for the next term emphasizes a substantial expansion of manufacturing, exports, MSMEs, employment, rural incomes, and the empowerment of women and youth, as well as physical and digital infrastructure.

It will prioritize housing, defense, railroads, aircraft, electricity, roads, electric vehicles, etc. under the infrastructure domain. Future policies shall be guided by sustainable, technologically advanced, regionally balanced, and internationally united development.

The brokerage anticipates that the party will be more proactive in developing policies and carrying them out in its third term. In its next term, it is also expected to carry out policies that were established under the previous administration. Over the next five years, a broad emphasis across all industries and segments is anticipated.

"We expect broad-based focus across sectors and segments over the next five years. Thus, we remain bullish on India’s economy and equities with a long-term perspective. We expect the country’s economy at $6.7 trillion and the Nifty at 40,000 by FY30," Phillip Capital said.

The brokerage said that although the BJP’s manifesto suggests policy continuity, there is more scope, clarity, confidence, and rigor at work.

The BJP's manifesto also includes plans to develop India as a global manufacturing hub for the auto industry, which is expected to benefit auto suppliers like Motherson and Sona BLW. 

The party's support for the transition to EV manufacturing will impact stocks like Tata Motors and TVS Motor. 
The expansion of the PM-eBus Seva scheme is expected to benefit companies such as Ashok Leyland, Tata Motors, JBM Auto, and Olectra Greentech. 

The party's plan to increase the MSP for major crops will benefit stocks such as Escorts Kubota and M&M. In the banking sector, the expansion of mudra loan limits will be positive for public sector banks, small finance banks, and microfinance institutions. The expansion of the PM Awas Yojana will be positive for HUDCO. 

The BJP's plan to invest in establishing an EV charger infrastructure will benefit stocks such as Sundaram Finance, Shriram Finance, and Chola. 

The party's slum redevelopment policy and strengthening RERA will be positive for major steel players. The expansion of natural gas connections to households will be favorable for Welspun Corp, Maharashtra Seamless, and Ratnamani Metals. 

The “Har Ghar Nal se Jal” scheme to provide clean drinking water will be positive for DI pipes, HSAW pipes, and plastic pipe players. UltraTech Cement and Ambuja Cement will be the largest beneficiaries. 

In the FMCG sector, Dabur, Emami, and Bajaj Consumer are expected to benefit, while modest negative for private dairy companies like Hatsun Agro, Heritage Food, Dodla Dairy, and Parag Milk Foods. The expansion of research-linked incentive schemes will be positive for CDMO players like Divis, Syngene, Suven, and Ami Organic.