Things are going calm; everyone is expecting a clean sweep of Modi mania throughout the year. The decisions he took, the promises he made, the surgical strikes he approved and income-tax deductions he presented are only aiming for his win. But a political country like India and a month like May which is full of surprises and skepticism, where an IPL best finisher could lose on the last ball, where general elections are going to kick off, where World Cup 2019 will take place, your portfolio could dampen if the situation got unplanned in various scenarios.
Tighten up your seat belts as we are on the edge of once in a five-year event that is going to take place next week, which will direct the 50-stock bundle for a spree or a nosedive. Financial results, RBI policies, Monsoon predictions, they come they go, the effect they don’t but the aura of seven-phase polling general election is going to stay either for a break-neck rally from the arrival of Modi 2.0 or a knee-jerk fall from the orientation of Rahul Gandhi with the highest administrative chair of India. Things are not going to stay calm, neither they were in past while entering in the week of enumerating the seven phases of ballot box counting.
Technical charts are known to prepare the ground before the happening of an uncertain event in an economy and no event could be larger than what Indian economy is going to view on the suspicious May 23, 2019. On a daily scale, the Indian benchmark has completed the Elliot Wave cycle, which is known for analyzing financial market cycles and forecasting market trends, right before the outcome of exit polls and set up fresh ground for the market participants to make or break further.
Next week expected to be very volatile in the lieu of the outcome of the Lok Sabha election 2019. The market itself exhibits upswing and uncertainty however this week important event is in focus every serving government faces incumbency issues, will Modi led government face the same fate or it will repeat the historic win of 2014. We advise trader/ investor to pull up their sleeves and plan their trade accordingly,
The three scenarios which could emerge next week are as follows:
BJP IN FULL Majority: India’s chowkidar sarkaar in the center will juggernaut the 50-stock bundle after breaching of 11,550 levels. Surgical strikes, demonetization of money, NITI Aayog and growing entrepreneur’s initiatives had a great impact on people, which can make the crowd soar on a glimpse of him. The chowkidar’s sarkaar is known for making bold moves and quick decisions, which could ignite the Indian benchmark and breach the challenging 12,000 levels.
BJP LED NDA
- IF BJP WINS BETWEEN 250-255 SEATS: The formation of National Democratic Alliance with 250-255 seats may not delight the public nor it will push the index to higher levels as it will raise a little uncertainty in the market participants about the stability of the government and the freedom for talking decision further. While the formation will not harm as the index could drag to 11,000 levels but it will give an opportunity to the investors to buy the potential stocks from 11,100 levels. However, if the BJP slips below 250 then the formation of the National Democratic Alliance will raise a question over the credibility of the central government and the clouds of instability could hover on the street. The 50-stock bundle is expected to break down to a level of 10,400 in these circumstances.
- IF BJP FALLS BELOW 240: This could be the worst situation for the currently serving government, as it will pave the way for the biggest opposition party to play in center. United Progressive Alliance is known for bringing out surprises similar to the case of 2004 as the street was not expecting the arrival of them. Old ideas in the new face are not expected to delight the public of India as their speeches in rallies and media had not made the crowd roar for a single glimpse of him. The orientation of Rahul Gandhi to the highest chair of Indian economy could a panic the market participants could breach the psychological support of 11,000 and the 50-stock bundle could drag to 10,000 levels.
Even though the market will move through the doldrums of general elections, an investor can shift his portfolio in these low-beta stocks:
About the bank: HDFC Bank Ltd is the pioneers of Indian banking and financial service company. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India.
Result Snapshot: NII increased 4.08% QoQ while on YoY basis, there is an increase of 23% growth in interest expended is grown more than the interest earned. During the quarter, PAT recorded 5.36% while on YoY basis; there is a sharp rise of 22.63%. Bank's provisions and contingencies are flat at 0.60% QoQ and 22.73% in YoY and Gross NPA% is similar in QoQ but 1.36% fall in YoY basis.
At CMP, the stock is trading at 1-year trailing multiple of 3.7x.
About the Company: India’s leading FMCG marketer Company. ITC Foods is the 3rd largest in India. The companies headquartered in Kolkata, West Bengal with five diversified businesses are Fast-Moving Consumer Goods, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business and Information Technology.
Result Snapshot: Net sales climbs by 13% of Rs. 12,064.15 crores in Q4FY19 compared to Rs. 10,705.75 crores in Q4FY18. Net profit during the quarter grew by 19% stood at Rs 3,481.90 crore in March 2019. Cigarette sales are reported at Rs 5,486 crore, up 11% on a yearly basis. Sales from hotel operations are seen at Rs 510 crore vs Rs 408 crore, up 25% on a yearly basis.
At CMP, the stock is trading at 1-year trailing multiple of 27.7x. Net Debt/equity stood at 0.1x.
About the Company: Bajaj Finserv is India's most diversified NBFC. It is a part of Bajaj Holdings & Investments Limited, focused on lending, asset management, wealth management and insurance along with consumer finance businesses, life insurance, and general insurance.
Result Snapshot: Operating revenues landed to 7,988.72 crores increased by 33.01% QoQ and 44.31% YoY. NII stood to 3,121.71 crores fall by 6.89% QoQ while on YoY basis; there is an increase of 35.14%. Net profit of the company Rs. 1,433.94 crores, marginal increase of 0.92% QoQ but a sharp increase of 36.71% YoY.
At CMP, the stock is trading at 4.6X. Net Debt/equity placed at 1.58x.
AMARA RAJA BATTERIES:
About the Company: The US returned founder Dr. Ramachandra N Galla, has started this group in 1985. It is India’s one of the fastest growing conglomerate company with a revenue exceeding USD 1 Billion. The group caters in the automotive battery business, packaged foods and beverages, electronics products manufacturing, infrastructure sector, and power system production.
Result Snapshot: Net Profit increased to 9% of Rs 119 crore in Q3FY19 over Rs 109.84 crore in the same period last year. While Profit Margins stood at 7.69% for the quarter ended 31st Mar’19. Net Revenue stood at Rs. 1,566.73 cr, from Rs. 1,694.66 cr in December quarter 2018.
At CMP, the stock is trading at 18x. Notable, risk should keep in mind that price reduction in the auto replacement market. Net Debt/equity placed at 1.58x.
About the bank: One of the pioneers in the banking sector being the first to digitalize all its branches in the country is headquartered in Aluva, Kerala possess more than a thousand branches. The bank has a vision of being ‘Most Admired Bank’ by enabling itself al-round digitally administered with a sharp focus on Micro, Medium and Middle market enterprise.
Result Snapshot: NII landed to 109,653 lakhs increased by 1.79% QoQ while on YoY basis; there is an increase of 17.5%. Net Profits recorded up 14.35% net profits that are landed to 38,151 lakhs after tax while on a YoY basis, there is a sharp rise of 163.13%. However, Gross NPA% is decreased by 3.2% QoQ but increased by 16.6% YoY.
At CMP, the bank is trading at 1.6X book.
What Market Experts says :
Nifty witness heavy short covering in the previous week in Option space which indicates bulls are gearing up .Nifty can see levels around 11600-11800 if BJP comes in majority , If it fails to remain in majority then Nifty can see correction upto 10-15%.Investors can look to create long postions in SBI,HDFC BAnk, HDFC lts & Relaince Industroes as Option data sugets long buildup in the stocks" says Mr Nitin Murakra, SMC Global Securites
Mr Anuj Gupta of Angle Broking suggets USDINR might appreciate next week, further precious metal could face heat as Dollar edge up.
Religare Securities, Ajit Mishra says avoid Naked postions in the market , the bias remained positive for market as option data suggets 11800-12000 in Nifty.
Mr Sumeet Bagadia of Choice Broking remain optimistic and expect Nifty to touch life time high on the Judgment day.He remained bullish on Auto & Banking stocks
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