3 Tata Stocks In FMCG, Steel, Power Sector Are Best Bets Ahead Of General Election 2024; Up To 25% Rise Seen

The general election in 2024 is one of the major factors that will drive the mood of the Indian market. A saffron reign for the third time in a row is something that the stock market has warmed up to and would expect the same outcomes from April to May 2024. If that happens, three stocks are among the primary beneficiaries of the key agendas that are backed by Prime Minister Narendra Modi-led government.

According to Fisdom's research report, "Given our assumption that the BJP is likely to secure power, we anticipate a continuation of their key broad agendas outlined in the Manifestos of 2014 and 2019." It added, "Consequently, sectors aligned with these key agendas are poised to be the primary beneficiaries."

That being said, Fisdom has recommended buying in three Tata Group-backed stocks which are expected to benefit from the coming back of BJP-government. Here's what the brokerage said:

1. Tata Consumer Products: (TP 1: Rs 1,100, TP 2nd: Rs 1,150, CMP: Rs 1,086.80, Potential Upside: 1.2-5.82%).

Tata-backed FMCG giant, Tata Consumer Products has surged from Rs 700 levels to Rs 1000 mark in 12 months, giving a huge 30% returns. After consolidating for 24 months, Tata Consumer's share broke out from a bullish rectangle pattern on the monthly chart, indicating a continuation pattern.

Also, the stock's RSI (14) indicates an inverted head and shoulder pattern breakout, moving above 60 with a potential bullish crossover. Prices are above the 21, 50, and 100-month EMAs and various indicators hint at a bullish trend.

Fisdom's note said, "We believe that the perspective that the company is undergoing a transformative journey towards establishing itself as a leading FMCG entity. The expansion of its distribution network and a digital emphasis throughout the supply chain are poised to propel the company into the next phase of growth."

On December 29th, Tata Consumer shares ended at Rs 1,086.80 apiece, up by 4.29% on BSE with a market cap of Rs 1,00,964.99 crore. Also, on the last day of 2023, the stock touched a new 52-week high of Rs 1,094 apiece. In 2023 alone, the stock gained by 42.55%.

2. Tata Steel: (1st TP: Rs 155, 2nd TP: Rs 170, CMP: Rs 139.50, Potential Upside: 11-22%).

This steelmaker of Tata Group is a behemoth and recently experienced a breakout on the monthly chart, accompanied by a notable increase in trading volumes. The breakout is characterized by a symmetrical triangle pattern, and the stock's prices have successfully maintained their position above the upper boundary of this pattern. It indicates a likely extension of the previous upward trend after a brief consolidation phase.

Apart from this, various indicators and oscillators for Tata Steel's stock are aligning, suggesting an attractive 'buy-on-dips' opportunity. These metrics consistently register above the polarity levels, reinforcing the prevailing bullish sentiment.

Overall, brokerage Fisdom believes that Tata Steel stands as a linchpin in India's thriving steel sector, poised to leverage the sector's ongoing growth in CY23 and beyond. Also, its adept financial performance, strategic capex timing, and skilful debt management position place Tata Steel for continued success.

Additionally, Fisdom's note explained that Tata Steel's savvy backward integration approach proves invaluable in navigating challenges posed by persistent raw materials price fluctuations. In essence, Tata Steel's solid strategy and performance make it a compelling investment choice for both seasoned analysts and everyday investors.

On BSE, Tata Steel stock touched a new 52-week high of Rs 141.20 apiece on December 29th before ending at Rs 139.50 apiece up by 1% with an m-cap of Rs 1,71,546.62 crore. In 2023, the stock gained by 17%.

3. Tata Power: (1st TP: Rs 380 2nd TP: Rs 410, CMP: Rs 332.05, Potential Upside: 14-24%.)

This powerpack stock of Tata Group is structurally bullish, forming highs and higher bottoms. A recent breakout on the monthly chart with substantial volumes signals a potential continuation of the uptrend. Also, the stock's RSI (14) exhibits a bullish momentum, advocating a 'buy-on-dips' strategy for weekly and monthly time frames.

According to Fisdom, Tata Power is strategically positioned to seize this opportunity. Also, the company is slated to invest Rs 600 billion until FY27 across generation, transmission, and distribution, with a substantial 45% allocation towards expanding renewable capacity, representing a two-fold growth compared to the capex during FY20-23.

Moreover, the company's financial performance has exhibited remarkable resilience, marking the 16th consecutive quarter of profit growth. Further, the fundamentals of all existing businesses, including new ventures in renewables and distribution remain strong.

Considering this, Fisdom expects consistent growth in revenues and profits in the next 1-2 years. Hence, it has initiated a buy rating on the stock.

On the last day of 2023 (December 29th), the stock price ended at Rs 332.05 apiece, up by 0.74% with a market cap of Rs 1,06,101.25 crore. The stock was near its 52-week high of Rs 346.90 apiece. In 2023, the stock jumped by 57% on the exchange.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.