Best Stock Bets in Indian Market Before Lok Sabha Results

Ahead of Lok Sabha election results, the Stock bets are to be assessed with various factors such as crude price, rupee depreciation, global policies like US President Donald Trump threatening to impose fresh trade tariffs of worth $200 billion on Chinese goods etc.

However, historical data showed that the  post-election rallies have been broad-based and there have been positive returns for almost all sectors. Overall, Global developments and corporate results are the two main factors that will dictate the markets till the election result is known..

The new government needs to continue to focus on sectors like  housing, banking, hospitality, healthcare, infrastructure etc. The conservative sectors like pharma & FMCG are expected to perform before results.

ICICI Bank (NSE: ICICIBANK)

The ICICI bank is expected to rebound its profit from FY201920. Currently the stock is trading at discount compared to its peers. This is on back of 5% fall in the net profit to Rs 969 crore in the fourth quarter versus Rs 1,020 crore. However, during the quarter the NII was up 26.5% at Rs 7,620 crore compared to Rs 6,021.7 crore, YoY. The ICICI bank stock is expected to perform post results.

Dabur India (NSE: DABUR)

The government is focusing on rural population for elections. 45 percent of domestic revenues of the company come in from the rural markets. Currently, the rural markets remains under-penetrated as far as staple products are concerned. The company has increased its focus on gaining market share significantly over the past few years.More likely investments in rural India will support the company to grow further.

Future Consumer Ltd (NSE: FCONSUMER)

Group Company Future Retail’s (FRL), which is the retail network will provide Future Consumer a platform to customize and innovate its product offerings and to boost sales. Big Bazaar and Easy Day were projected to increase the total number of outlets from 235 and 538 in FY17 to 300 and 2,300 in FY20E respectively. The stock is expected to perform with the target price of Rs 70 for long term

Dewan Housing Finance Ltd (NSE: DHFL)

DHFL has healthy capital adequacy and DHFL’s loan book is reflecting rise in demand for home loans, which means the company is expected to post more than 20 percent loan growth over next two-three years. Further, DHFL had sold 50 percent stake held by it in DHFL Pramerica Life Insurance Co Ltd which has increased its net worth by Rs. 1,969 crore.

Strong NIM due to lower cost of funds and lower credit cost will ensure growth for the company. The company has also maintained good asset quality. The company is expected to grow its earnings by more than 28 percent. We maintain Buy on the stock with a target price of Rs 250 for a year. Modi’s Awas Yojana is another booster for the company therefore, you may not be surprised to see a positive stride in post lok sabha poll results. 

This time the market has already factored the victory for National Democratic Alliance (NDA), which is led by Narendra Modi, but with a reduced majority. Therefore a negative surprise could see different reaction among the investors. The investors who have an appetite for risk and can face the volatility in market should stay invested.