General Elections 2024: IOC, HUL among top 10 stock picks offering 10-20% upside (2024)

According to domestic brokerage firm Shriram Way2Wealth, the reason behind equity markets following the elections, is the fact that investors anticipate a strong capex momentum to continue with PM Modi-led government. ‘’This would bolster investor sentiments and may result in continued rally in PSU sector on the back of rerating seen previously and policy continuation,'' said the brokerage in its report.

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Liquidity infusion in rural economies would be a significant catalyst to stimulate rural consumption demand which has been missing for the last few quarters on account of below average monsoon, El-Nino impact, suppressed agri commodity prices, and elevated inflation. Resultantly, rural focused pockets such as FMCG, tractor and agri-equipment manufacturers may remain on investor’s watch list, according to the brokerage.

Another important sector to watch, is the agro- chemical sector which may react positively if the government announces large fertilizer subsidy keeping in view of large agriculture based vote bank ahead of the elections.

In the current market scenario, Shriram Way2Wealth has released its top 10 General Elections 2024 stock picks for this election season. The brokerage has selected the quality stocks based upon technical as well as fundamental parameters. The brokerage sees a potential upside of 10-20 per cent on the following 10 stocks in the medium-to-long term.

General Elections 2024 Stock Picks:

Let's take a look at the top 10 stock picks for General Elections 2024 by brokerage Shriram Way2Wealth:

1.Bharat Electronics Ltd (BEL): Current Market Price (CMP): ₹185.90; Target: ₹215; Upside Potential: 14 per cent

BEL is currently demonstrating strong momentum as it trades around its all-time high. The stock has broken out from the bullish rectangle chart pattern on the daily chart, indicating a potential continuation of the upward trend, possibly moving towards levels of 203/212/225/261.

Based on the observation, it is likely that the stock will continue its uptrend in the short to medium term. On the downside, support for BEL is at 176/164 levels. Given these factors, it can be inferred that BEL is displaying robust performance for medium to long-term gains, according to the brokerage.

2.Hero Motocorp Limited: CMP: ₹4,818.55; Target: ₹5,020; Upside Potential: 14 per cent

Hero Motocorp is having the largest share in the entry level (100-125 cc) segment and access to Tier 2-3 cities and towns, will be the major beneficiary during this time period.

Technically, Hero Motocorp has been trading within a consolidating phase between 2,260 and 2,890 levels for the past two years. On July 3, it broke above this range with a substantial increase in volume, suggesting a positive bias. The stock is supported by an upward sloping trendline reinforcing the positive trend.

The stock has recently shown a positive crossover above the 50-day EMA and 200-day EMA on the price chart accompanied by increasing volumes that support bullish sentiment. Based on these observations, the brokerage recommends purchasing Hero Motocorp for medium to long-term gains.

3.Hindustan Unilever Limited (HUL): CMP: ₹2,351; Target: ₹2,828; Upside Potential: 11 per cent

Strong product profile, leadership positioning in key categories and extensive distribution reach will enable HUL to achieve faster recovery compared to peers in the event of demand recovery. At CMP, the stock is trading at 58x TTM EPS of ₹43.6. Technically HUL has been trading with in symmetrical triangle pattern on the weekly chart which is a long-term bullish structure.

The stock is in strong consolidation zone with good volumes, and this indicates one should accumulate the stock at lower levels for medium term to long term. The stock is trading above its 200 days exponential moving average, suggests long term trend is bullish.

‘’We suggest long-term traders are advised to buy and accumulate the stock at current levels for a possible target of 2,630 levels,'' said the brokerage.

4. Indian Oil Corporation Limited (IOC): CMP: ₹189.90; Target: ₹210; Upside Potential: 11 per cent

After the election, historically prices tend to rise (since the government tend to keep an artificial freeze on prices during the voting period) thereby enabling margin improvement for oil marketing companies like Indian Oil.

Technically, IOC has been in an uptrend for the past two years, consistently forming higher highs and higher lows on the weekly chart. On November 1, 2023, the stock experienced a positive breakout of the bullish flag chart pattern, which is considered a continuation pattern and accompanied by a substantial increase in volume supporting bullish sentiment.

‘’Based on these observations, we recommend investors consider purchasing IOC for medium to long-term gains,'' said the brokerage in its report.

5.Indian Railway Catering And Tourism Corporation Limited (IRCTC): CMP: ₹951.30; Target: ₹1,080; Upside Potential: 16 per cent

IRCTC has stated that it is eyeing pan-India non- railway catering business which should auger well during this time period. Vande Bharat trains (along with Amrit Bharat Express) during this time will also add revenues to the rail Neer, catering and tourism business also.

Tracking weekly chart, IRCTC has given bullish breakout from the symmetrical triangle pattern on weekly chart suggesting positive bias and it can move towards 992/1,120 levels.

Technically the chart structure on IRCTC is likely to remain strong in medium to long term and a move over the above mentioned level could lead to fresh uptrend as it can test 1,280. Based on above- mentioned observations, Investors are advised to buy/accumulate IRCTC for medium term to long term gains.

6.New Delhi Television Limited (NDTV): CMP: ₹261.90; Target: ₹325; Upside Potential: 21 per cent

Elections are crucial events where people seek reliable and credible information. NDTV, a prominent news channel, can experience a surge in viewership during these periods. Advertisers may pay premiums to reach a larger audience, leading to higher revenue, according to the brokerage.

NDTV has given a breakout from the downward resistance trend line which is suggesting positive outlook in near term. On weekly chart counter was facing pressure at resistance trend line, now it has crossed and sustaining above those levels. Volume is also picking up with price momentum showing positive strength in the stock. The stock is trading above short term, medium term, and long-term moving averages, as per the brokerage.

7.State Bank Of India (SBI): CMP: ₹634; Target: ₹700; Upside Potential: 10 per cent

Relative underperformance by the bank with respect to peers as well as indices for last few quarters makes it an attractive buy at current valuations favoring the risk reward ratio. SBI has signaled a breakout on medium term chart above ascending resistance line after prices gapped up above 588 and managed to close above the same.

With medium term price pattern resembling to an inverted head and shoulder structure, it paves way for sharp upside from current levels. The visual attributes of candlestick pattern on the weekly chart shows upside momentum. Technically the chart structure on SBI is suggesting positive bias and it can move towards 670 and 690 levels, according to the brokerage.

8.UltraTech Cement Limited: CMP: ₹9,815.35; Target: ₹10,980; Upside Potential: 11 per cent

Continuing the trend of the past few quarters, cement demand has remained strong in previous quarters backed by robust infrastructure and rural demand. Governments often expedite project completion before General Elections which typically boosts short-term cement demand.

Ultratech, being the largest firm in the sector, with a significant footprint, expansion objectives, and greater capacity utilisation, might be a key benefit of the event. Recently, the the stock showed a positive breakout from a rising upward channel chart pattern on the weekly chart with steady volumes, indicating a positive bias.

Resistance for the stock is foreseen at 10,137/10,241 levels, and a breakout above 10,241 could potentially propel the stock towards 10,521/11,010 levels in the medium to long term. Based on these observations, the stock is likely to remain positive and advised to apply buy on dips strategy for medium to long-term gains.

9.United Spirits Limited: CMP: ₹1,069.5; Target: ₹1,192; Upside Potential: 12 per cent

Consumer behaviour is undergoing a structural shift with consumers preferring to experiment and repertoire drinking has picked up as a trend. Further, the relatively lower per capita liquor consumption in India than other South East Asian countries is also expected to support the long-term volume growth of the company.

The weekly chart of MCDOWELL-N illustrates a clear uptrend with rising volumes. After testing the all-time high of 1,132, the stock entered consolidation zone with the overall trend remaining bullish.

Moreover, the stock is trading in a rising upward channel pattern with steady volumes, supporting the positive bias. Currently, it is trading above both the 50-day and 200-day moving averages, offering a positive outlook for medium to long- term investors.

10. Varun Beverages Limited: CMP: ₹1,425.05; Target: ₹1,452; Upside Potential: 18 per cent

Strong product profile, leadership positioning in key geographies and extensive distribution reach are key growth drivers. ‘’We remain positive on Varun Beverages despite its higher valuations, given the longevity of growth in various categories they serve. At CMP, the stock is trading at 80x TTM EPS of ₹15.3,'' said the brokerage.

On weekly chart, the stock has been trading well above its major long term exponential moving averages (100 days – 725 & 200 days – 535) suggesting long term trend on Varun Beverages continues to remain bullish.

The stock has been moving in an upward slopping channel since July 2022 on the weekly chart and holding above its key support level of 1,129 suggesting positive outlook. Technically, the stock is likely to remain bullish and the brokerage suggests to buy and accumulate on every dip for medium to long term gains.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Published: 16 Feb 2024, 06:32 AM IST