Shares of companies in capital goods, infrastructureNSE 0.00 %, construction, power and NBFCs rallied on Monday encouraged by the exit poll, which pointed to a BJP-led coalition victory in the general elections. These sectors are likely to benefit if BJP returns to power, said analysts.
“Given the NDA government’s focus on infrastructure development as stated in BJP’s manifesto, we see renewed buying interest in companies from construction, infrastructure and building material sectors,” ..
BSE’s capital goods, finance, realty, power and industrial indices gained more than 5 per cent each on Monday while the bankex, utilities and energy indices gained between 4 per cent and 5 per cent .
Analysts said NBFCs and industrials are trading at cheaper valuations compared to exporters like technology and pharma.
“We recommend an overweight on private financials, including NBFCs, industrials cyclicals and are neutral on IT,” said Suhas Harinarayanan, head of research at JM Financials. “If the results are indeed in-line with the exit polls, there is a strong likelihood of the rupee strengthening in the nearterm leaving IT as an under-performer.
Analysts are advising investors to use the rally to exit troubled companies.
“Among the sectors, we remain positive are banks (peaked-out NPA cycle, asset resolution and relatively robust earnings) and infrastructure/ capital goods (strong execution and order inflows, benefits of benign interest rates) in the near term,” said Pankaj Pandey, head of research, ICICI Direct.
According to Naveen Kulkarni, head of research at Reliance Securities, there could be a rally in specific s ..
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