In the absence of anything more substantial, market chatter (and analysis) continues to be centred around the low voter turnout and what it could mean for the NDA coalition’s prospects.
Antique Stock Broking is the latest to weigh in on the ongoing debate. Analysts Pankaj Chhaochharia, Dhirendra Tiwari, and Abhimanyu Godara feel the NDA may improve its 2019 tally but fall short of the opinion poll expectation 370-410 seats.
The trio on why the low voter turnout won’t hurt BJP and allies:
“a) First time optional postal ballot facility to voters aged 85+ and the disabled may lead to an upward revision in voter turnout; b) There is a significant expansion of its voter base (especially among lower-income households); c) Analysis of voter turnout mapped against the winning margin suggest that BJP is better placed.”
Right now, the market does not appear to doubt that the NDA will be returning to power. The question uppermost on everyone’s mind is: how will stock prices move if the BJP gets even a couple of seats less than last time or just a few seats more than last time. That is where the big money will be made or lost
Mahindra and Mahindra (Rs 2,510, + 5.8%)
Reported a robust Q4 led by the automotive segment
Bull argument: The company's utility vehicle segment continues to see strong growth. Analysts see the momentum continuing through this year. Farm equipment business, which has seen a decline of 7 percent in FY24, is likely to improve in FY25.
Bear argument: Stock has run up over the last year. Valuations factor in new launches.
Shree Cement (Rs 26,289, flat)
Company reported a healthy set of fourth-quarter numbers
Bull argument: Realisations were ahead of analyst estimates and company managed to keep operating costs in check. Despite a sharp downtick in pricing, the company delivered industry-leading EBITDA/mt of Rs 1,393/mt says Centrum.
Bear argument: Outlook on the cement sector in general remains cautious as pricing power is weak despite strong demand. This indicates that players are undercutting each other.
HAL (Rs 4,715.05, 2.4%)
The defence major extended gains after reporting a strong Q4.
Bull argument: Elara Capital sees opportunities from indigenisation along with unexplored export opportunities in the aircraft and helicopter industry. Company already has an order book in excess of Rs 94,000 crore.
Bear argument: Risk of delayed execution, competition from private players and any reduction in defence budget.
Info Edge (Rs 6,222, +6.06%)
The company reported a net profit for the quarter ended March.
Bull argument: Attrition at IT Services companies has further reduced in Q4 while utilisation increased further. Nuvama believes hiring by IT companies shall improve further, which shall lead to billing growth acceleration.
Bear argument: Continuing losses in the real estate and matrimony segments as a result of competitive intensity could impact the stock. Analysts are divided on whether the IT sector will see a strong recovery that needs lots of hiring.
(With inputs from Anishaa, Veer, Zoya)
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