10 Stocks to Ride Modi ‘Wave’

The Economic Times - - Markets + Finance -

In­dian stocks have surged, fu­elled by ex­pec­ta­tions that a BJP-led govern­ment, hav­ing won the re­cent elec­tions with a re­sound­ing ma­jor­ity, could put the econ­omy back on growth track. The stock mar­ket is bet­ting the new govern­ment will fo­cus on sec­tors such as bank­ing, in­fra­struc­ture, power, high­ways and tele­com to boost growth. Though the mar­ket ral­lied sharply ahead of the poll re­sults, there could still be some steam left in se­lect stocks. ET has com­piled a list of 10 stocks that could ben­e­fit the most from a pol­icy push. 17.1% in 2006-07, ac­cord­ing a re­cent re­port from In­dia Rat­ings. Sim­i­larly, for­eign ex­pen­di­ture as a pro­por­tion of to­tal ex­pen­di­ture in­creased to 41.8% in 2012-13 from 38.6% in 2006-07, the re­port said. The ru­pee’s steady rise is bound to have a pro­found im­pact on In­dian in­dus­try. ET In­tel­li­gence Group has picked the sec­tors and com­pa­nies that will gain or lose the most from an ap­pre­ci­at­ing ru­pee. The anal­y­sis has left out the IT sec­tor, which is the most ob­vi­ous sec­tor to suf­fer due to an ap­pre­ci­at­ing ru­pee. The do­mes­tic pharma in­dus­try re­joiced when the ru­pee fell last year be­cause most of its rev­enues comes from the US and Europe. The ru­pee’s U-turn is likely to hurt ex­port rev­enue earn­ers such as DRL, Lupin, Ci­pla and Sun Pharma. Ran­baxy and Aurobindo Pharma, which have sig­nif­i­cant for­eign debt, will ben­e­fit from any ap­pre­ci­a­tion in the ru­pee. The ru­pee’s ap­pre­ci­a­tion is likely to erode the ex­port com­pet­i­tive­ness of this in­dus­try. Un­less this is com­pen­sated by a pickup in do­mes­tic de­mand, play­ers such as and could wit­ness mar­gin pres­sure. Large for­eign cur­rency debt of these com­pa­nies will re­sult in mixed im­pact.

JSW Steel

Tata Steel

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