POST ELECTION MARKETS PROSPECTS :

Indian stocks have surged, fuelled by expectations that a BJP led government, having won the
recent election with a resounding majority, could put the economy back on growth track. The
stock market is betting on new government and will focus on sectors like banking, infrastructure,
oil & gas, power and telecom.
AGENDA FOR GROWTH BY THE NEW GOVERNMENT
FINANCE SECTOR-
Plan to encourage domestic manufacturing through a review of imports and tariffs.
Plan to boost business sentiments and stability in prices.
Steps to deepen financial sector and rationalize the regime for foreign investment.
Free movement of goods, open market sales to enable price discovery of agricultural
goods.
Infrastructure revival by energizing PPP, help in land acquisition and cut litigation.

HIGHWAYS-
Allow banks to raise exposure limits for lending to infrastructure sector from current 10-
11%.
Relook at current EXIT policy.
Dispensation for forest and environment clearances for strategic roads and those in border
areas and north east.
Power to make amendments to the model concession agreements instead of going
through time consuming cabinet approval process.


TELECOM-
More liberal mergers and acquisition regime to spur consolidation.
Provision of Wi-Fi facility at urban centres and the creation of digital highways.

PETROLEUM AND NATURAL GAS-
Decision on high cooking gas and kerosene subsidy.
Measures to boost energy securities , reduce oil import bills and encourage investment
in the sectors.
Continuous mining in exploration areas.
Pricing of KG gas basin.

COMMERCE AND INDUSTRY-
Creating 10-15 large manufacturing firms.
Boosting manufacturing which will include assessment of impact of FTAs (free trade
Agreement).
Allowing NRIs to invest in a larger way.
Decision on special economic zones to make them more attractive.
Boosting exports-focus on service exports and identification of new market.
Fast moving consumer goods (FMCG) :
Stocks Cmp
(RS.)
Mkt.cap
(crores)
EPS(RS.)
Fy(14) fy(13)
P/E ratio
Fy(14) fy(13)
Book value
(Rs)
P/B
(%)
52
WEEKS
HIGH
52
WEEKS
LOW
Itc 341 271,389.
37
10.61 9.39 32.24 34.34 28.06 12.19 386 285
Hul 563 121,792.
24
17.88 17.56 31.45 32.85 12.36 45.41 725 536
Godrej
consumer
804 27,371.5
2
16.59 15.01 48.46 56.96 97.71 8.10 977 672
Colgate-
palmolive
1361 18,518.8
2
39.03 36.53 34.97 37.34 36 38.16 1522 1190

MID & SMALL CAP

Jubiliant
foods
works
1156 7,564.75 19.22 20.70 58.91 61.11 85.91 13.40 1389 928
Jyothy
lab.
204.
30
3730.81 4.90 2.73 42.06 69.96 37.05 5.56 223.10 142.5
Gillette
india
1936
.90
6332.89 15.69 26.75 123.85 77.53 119.24 9.75 2464 1850
Tata
global
beverages
153 9,510.97 6.19 4.18 24.72 38.31 37.49 4.20 170 128
Kansai
nerolac
1278 6,889 38.34 54.22 33.65 20.28 238.62 5.72 1326 975
Emami 434 9,850.39 17.55 14.65 25.27 32.69 44.96 10.25 539 393

Vadilal ind 197 141.50 1.57 8.31 125.35 18.29 160.14 1.23 235 101.5




The sector is considered defensive, which means its stocks are in high demand when the
markets are falling. The reason is simple. Irrespective of how the economy is performing,
the demand for consumer goods, daily necessities like food and toothpastes, remains
stable. During difficult times, people will reduce spending on discretionary items such as
cars and air-conditioners but continue to buy basic essentials.
The main reason for this sector to perform better is that all their transactions are on cash
basis. So no loan requirement and also the proper working capital cycle is maintained
within the company.



Oil and Gas sector
Stocks Cmp
(RS.)
Mkt.cap
(crores)
EPS(RS.)
Fy(14) Fy(13)
P/E
Fy(14) fy(13)
Book
value
(Rs)
P/B
%
52
WEEKS
HIGH
52
WEEKS
LOW
Gail 413.
85
52,495.
45
31.7 31.71 13.06 10.78 191 2.23 435 273
Reliance
industries
ltd
1078 348,470
.71
68.01 65.05 15.85 13.62 556.94 2.03 1142 765
Indrapras
a gas ltd
170.
35
7918.65 24.93 35.94 6.83 3.23 274.64 3.08 173.9 60.50
Oil india 606.
90
36482.9
4
52.90 59.71 11.47 8.04 319.59 1.93 629.70 415
Petronet
lng ltd.
157.
40
11805 9.49 15.32 16.59 7.96 59.33 2.32 160 102.50
Hpcl 424.
65
14,379 141.8 26.72 2.99 8.83 405.34 1.07 447.85 158
Hind oil
explration
66.1
5
863.21 - -42.2 - .957 50.30 1.32 69 22.25


the new government is expected to continue with its ongoing monthly diesel price hike leading to
full deregulation in the next few quarters. The market is also expects the new gas price
notification to be issued soon. Subsidy rationalization and higher gas price hike could result in e-
rating of the stock.
POST ELECTION AFFECT ON HEALTHCARE SECTOR

When the general election results indicated a landslide victory for Narendra Modi led BJP,
Sensex, the index of Bombay Stock Exchange, rose to a record high. But not all shares gained.
The share prices of all major public listed pharmaceutical companies, considered to be the most
defensive of all stocks, fell.
The reason why Pharma stocks did not follow the market sentiment which cheered Modis
ascent towards Prime ministership was simple. The stock market rally was caused by the dollar
denominated investments made by the foreign institutional investors (FIIs), and the surge of
dollar had resulted in rupee appreciation against dollar. More than anyone else pharmaceutical
industry, which earns approximately $12 billion as sales revenues from the US market, had
reasons to worry. This sector is among the top losers along with IT and FMCG. It has negatively
fallen by -3.66% according to BSE sectoral indices.
The drug making sector expects the new government led by Narendra Modi to take a tough
stand on issues with the US. The sector largely driven by exports, clocks significant revenue
from supplies to the US, the worlds largest drug market .India is the biggest supplier of generic
medicines to the US, with domestic companies having 40% share in the $30 billion American
generic drug and over- the- counter product market. On the other hand , it is also a significant
market for Indian companies, with leading drug makers clocking 40-60% of their consolidated
sales .
















Stocks

Cmp
(RS.)
Mkt.cap
(Rs. Cr.)
EPS (RS.)
Fy(14) fy(13) fy(12)
PER
Fy(14) fy(13) fy(12)
Book
value
(Rs)
ROE
(%)
Cadila
healthcare
972.9 19708.97 43.13 24.35 32.11 22.32 33.145 28.05 186.33
Divis
laboratories

1295 17121.40 58.80 46.06 41.13 22.023 26.526 26.839 192.36
Lupin


931 41524.99 51.83 28.16 18.01 17.87 32.265 34.053 108.08
Aurobindo
phrama

619.35 18026.62 31.05 17.03 -1.46 19.94 23.07 -129.657 100.84