IRCTC, BEL, HUL, Ultratech, Adani Among Top 10 Stocks To Buy Ahead Of 2024 General Election

The General Election is the most important event of 2024 as the Safron party which is the current ruling government of the country, will be rivalling once again to take its reign. Accordingly, the elections will also be key triggers to the stock market. In fact, as per Shriram Way2Wealth, this 2024 election is that lighthouse event which could navigate the markets for the next five years. Amidst such, the brokerage has selected ten stocks which have the potential to benefit from this election, and hence it has recommended buying.

The top 10 stocks to buy are heavily dominated by PSUs such as Bharat Electronics, Indian Oil Corporation, Indian Railway And Tourism Corporation (IRCTC) and State Bank of India (SBI). Other stocks are from diverse segments but private companies listed on exchanges, including Adani Group's media stock NDTV, Hero MotoCorp, Hindustan Unilever, Ultratech Cements, United Spirits and Varun Beverages.

Some of these stocks such as SBI and Indian Oil have already met Shriram Way2Wealth's target prices.

In its research note, Shriram Way2Wealth said, "In India, General Elections act as one of the key triggers which significantly impacts the market volatility based on news inflows, sentiment changes and results of pre-poll surveys. It is that lighthouse event which could navigate the markets for the next five years as it may alter the course of policy decision making, infrastructure project announcement, budgetary allocations, etc."

The brokerage highlighted that more interestingly this year's general election has gained even more prominence in light of India's rising importance in geopolitics, leading position in emerging markets, aspirations to become the world's third-largest economy and a contest for current Prime Minister Narendra Modi to lead the largest democracy in the world for the third consecutive term.

The reason behind equity markets following the election outcome so keenly is the fact that it anticipates such strong capex momentum to continue in the future with PM Modi-led Bharatiya Janata Party (BJP) gaining majority in Lok-sabha. This would further bolster investor sentiments and may result in a continued rally in the PSU sector as a whole on the back of rerating seen previously and policy continuation, it added.

Shriram Way2Wealth expects rural-focused pockets such as FMCG, Tractor and Agri-equipment manufacturers may remain on investors' watch lists. Another key sector agro-chemicals may react positively if the government announces a large fertilizer subsidy keeping given large agriculture-based vote bank ahead of the elections.

That being said, apart from SBI and Indian Oil here are the top 8 stocks which has potential for further upside and Shriram Way2Wealth recommends buying in them ahead of the election:

1. Bharat Electronics (BEL): Target Price: Rs 215

The Election Commission of India (ECI) has historically vouched for BEL's EVMs since there are only two companies manufacturing EVMs under very strict supervisory and security conditions and there are rigorous Standard Operating Procedures meticulously observed at all stages under the supervision of a Committee of eminent technical experts constituted way back in 2010.

Also, the stock's momentum indicator RSI aligns with bullish sentiment with strength above 78 on the weekly chart. 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 compelling factors, it can be inferred that BEL is displaying robust performance for medium to long-term gains.

2. Hero MotoCorp: Target Price: Rs 5,020

The company has lined up a pipeline of new launches of 12 bikes in the year FY25 with Hero Maverick 440, Hero Xoom 125R and Hero Xoom 160 expected to be launched soon. This week, the company recently announced the prices and opened bookings for Mavrick440.

Technically, HEROMOTOCORP has been trading within a consolidating phase between 2260 and 2890 levels for the past two years. The daily MACD line is above its signal line with a considerable distance between the MACD lines, suggesting a strongly positive short-term trend. Sustaining above 4450 could propel the stock towards levels of 4772/5077. Conversely, support levels for the stock are observed at 4190/3890. Based on these observations, the brokerage recommends investors consider purchasing HEROMOTOCORP for medium to long-term gains.

3. Hindustan Unilever (HUL): Target Price: Rs 2,828

A 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.

In terms of support and resistance part, the resistance would be at 2670 and 2770 levels. On the lower side, 2440 is a crucial support level for the day and if overlapped with 2440 levels, the chances are that HINDUNILVR will retest the next support levels of 2315/2276. The brokerage suggests Long-term traders are advised to buy and accumulate the stock at current levels for a possible target of 2630 levels.

4. IRCTC: Target Price: Rs 1,080

With the upcoming General election in Ap-May'24, there is also expectation that many infra & construction workers travel to their villages & towns from cities to cast their votes for which travel by Road (by bus) and Rail is expected to witness an increase in demand. IRCTC to major beneficiary coinciding with the vacation period both from rail ticket as well bus bookings. Notably, IRCTC has already stated that it is eyeing the Pan India Non-Railway Catering business which should auger well during this period. Additional Vande Bharat trains (along with Amrit Bharat Express) during this time will also add revenues to the rail Neer, catering and Tourism business.

Technically, the chart structure on IRCTC is likely to remain strong in the medium to long term and a move above 992/1120 could lead to a fresh uptrend and it can test at 1280 levels. The support will be at 913/830 levels. Based on the abovementioned observations, Investors are advised to buy/accumulate IRCTC for medium-term to long-term gains.

5. New Delhi Television Limited (NDTV): Target Price: Rs 325

NDTV is an Adani Group-backed media company. 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. NDTV's unbiased reporting reputation can boost credibility, and attract viewers and advertisers, making it a worthwhile investment for 2024 GE.

On the support and resistance part, above 308, the next resistance for the NDTV would be around 388/438 levels. On the lower side, the support for NDTV is seen at 252 and 240 levels. Below 219 level, it could test at 208 levels.

6. Ultratech Cement: Target Price of Rs 10,980

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.

A positive crossover in RSI further supports the buying argument following the confirmation of the breakout on the price chart. Resistance for the stock is foreseen at 10137/10241 levels, and a breakout above 10241 could potentially propel the stock towards 10521/11010 levels in the medium to long term. On the flip side, support levels for the stock are identified at 9400/9150-9022 levels. Based on these observations, the stock is likely to remain positive and advised to apply buy on buy-on-dips strategy for medium to long-term gains.

7. United Spirits: Target Price Of Rs 1,192

The larger consumption story remains anchored in premiumisation with rising consumer aspirations, higher disposable incomes and drinking better, not more. The daily RSI is already in strong buy-on-dips mode, indicating that the prices are set to rally from the current levels. From a technical standpoint, the stock might encounter resistance at the 1132/1150 levels. A breach above 1150 could propel the stock towards 1178/1225 levels. On the downside, support for the stock can be identified at 1044/1023 levels.

8. Varun Beverages: Target Price: Rs 1,452

International geographies are likely to witness higher growth rates and seasonality issues are likely to come down further. Strong product profile, leadership positioning in key geographies and extensive distribution reach are key growth drivers. The brokerage remains positive on Varun Beverages despite its higher valuations, given the longevity of growth in various categories they serve.

Technically, the stock is likely to remain bullish and advise buying and accumulate on every dip for medium to long-term gains. On the higher side, the stock now faces resistance at 1380/1420 levels and should have a minimum upside till that level. Break out of 1420 levels would invite further buying and then the stock may face the upside targets of 1490/1560 levels in the medium-term scenario. On the downside, 1160/1122 would act as strong support and a slip below 1070 /1038 levels would negate the above positive view.

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.