Motilal Oswal in a recent note to investors has said that once the new government takes charge after election, expectation is that the reforms push would continue and markets are likely sustain the valuations, even though it may seem on the higher side.
Motilal Oswal AMC's Prateek Agrawal listed out few expectations in terms of what is likely to be on agenda after June 4, in a note to investors earlier this month.
Price Hikes
The high sensitivity to inflation during an election period has meant some price increases have got deferred, Prateek Agrawal said. He expects this to normalise after the election results, with telecom and cement being two spaces that could see some price increases. As has been the trend in the past, cement players are expected to hike prices after the elections process is over.
New Push to PLI
The Production-Linked Incentive schemes have been trying to catalyse investments in areas like mobile phones, laptops, TVs, air-conditioning. Motilal Oswal AMC expects more incentives for semiconductor components, OSAT, Lithium ion batteries, in an attempt to rope in more players.
Make in India
The push to indigenise defence production is expected to continue given the geo-political scenario, and more items are likely to be included in the Make in India list, said the note.
Capex Focus
The Make in India push of the current government has been supported by the PLI schemes as well as infrastructure capex, Prateek Agrawal wrote in the note. Investments in railway tracks, high-speed trains, better road infrastructure should continue, he added.
Privatisation on Agenda
Shares of PSU companies have yielded solid returns, and businesses like BEML, Concor and IDBI bank have been on top of the divestment list. With the election process wrapping up, one can expect some progress on this front, the note said.
Ideas in Focus
Prateek Agrawal wrote in the note that among the themes under coverage, he expects the defence theme to find favour. Companies that are a play on luxury consumption and capex should do well after elections, and good monsoons should help this trend. Investors can also look at the EMS space, that would benefit from fresh PLI rollouts, and the renewable space could see strong order inflows.
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