What to buy now? Brokerages pitch over 30 stocks to ride Modi 2.0 wave

Brokerage firms, including global and domestic ones, hailed the historic win of the Bharatiya Janata Party (BJP) in the 17th Lok Sabha elections. The election outcome points to continuity of reforms and brings an end to political uncertainty.

The ruling party at the Centre got an absolute majority -- an estimated 300 plus seats (330-plus for its alliance NDA) against the minimum 272 needed to form the government.

While the NDA was widely expected to win, its magnitude and breadth have defied expectations, say experts. Both the Sensex and the Nifty delivered about 11 percent per annum during the BJP's previous term, and expectations are that the rally is unlikely to stop anytime soon.

On Thursday, both benchmarks hit fresh record highs of 40,124 and 12,041, respectively. Analysts at top brokerages believe that the Sensex has potential to hit 45,000 while the Nifty50 could head towards 13,000 in the next 12 months.

With the Modi government back in power, the focus of the market will shift to the growth cycle and the RBI is expected to be more accommodative.

"We set our June 20 target for the BSE Sensex at 45,000 and Nifty at 13,500, an upside of 15 percent from here. We are adding Asian Paints and Interglobe Aviation to the Focus List at the expense of Adani Ports and Eicher Motors," said Morgan Stanley.

The global investment bank is overweight on cyclicals, consumer & industrials as well as financials. On the other hand, it is underweight on sectors such as healthcare and technology.

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Another brokerage firm, CLSA, is of the view that the focus now shifts to growth as an absolute majority would reduce the need for competitive populism. However, some near-term pro-farmer announcements would be likely.

The global investment bank expects a further push towards affordable housing, and midcaps should be back in favour as domestic flows improve. Coming to specific largecaps, the names that can find traction include ICICI Bank, Axis Bank, IndusInd Bank, HDFC, UltraTech Cement, RIL, Bharti Airtel, ONGC, and NTPC.

Its top midcap picks feature Godrej Properties, Sobha, Ramco Cements, Lemon Tree, Havells India, Astral Poly, Sadbhav and Dr Lal Pathlabs.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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