Modi 2.0 : Time to Modi-Fy Your Portfolio
By kanchan baghel |
Modi 2.0 | category1 | 0 comment | 03-June-2019 |
Modi 2.0 is believed to be more powerful and result oriented than Modi 1.0, with all the ministers in place for the Modi government, the mandate to all is clear – IMPLEMENTATION.
India in the last 70 years of independence has made many policies and government schemes, but the implementation of those schemes is simply pathetic, the reason as analysts believe is the lack of ‘ Intent’ to implement.
The Modi 2.0 is rigorously dedicated to the implementation of those policies and ensure the Ex Chequer’s resources are utilized to the fullest in all the aspects. But the bigger question for you as an investor (of course the massive celebration and ‘ chowkidar prefixes) is that whether your portfolio is aligned to take the maximum benefit of the new government's initiatives and vision .
And are you in those stocks, sectors which will benefit the most out of the reforms this government is making, let's see some sectors which will be the biggest beneficiary in the coming tenure of this government
1. PSE: Public sector Entities have been an underperformer since last 1-2 years mainly
Because of the uncertainty and partly because of the populist measure the government had undertaken at the expense of profitability of these companies, Modi is known for his turnaround in Gujarat based PSU’s during his tenure as a chief minister in that state, the same can be expected this time, especially when they have a clear mandate as an individual party.
2. PSU Banks: We have seen a drastic improvement in NIMs and gross slippages in the PSU Banks in the last 4 quarterly results, this is due to the free hand and NCLT resolutions which could not be possible without a proper INTENT to do so, we expect 10 times bigger moves in terms of NPA recovery and bank consolidation by the government in the coming term, mind you the PSU stocks are very cheap currently on EV/ Book value basis.
3. Infrastructure sector: If India is to grow the infrastructure sector needs to run, there is a pending slowdown in infrastructure and construction business, especially after the demonetization in the country, the new government will surely focus on bringing the infrastructure sector back on track, all the companies related to government projects, infrastructure, construction etc will be highly beneficial in this regime.
4. Cleanliness related companies: Modi government will enhance the focus on cleanliness and ‘Swach Bharat’ mission in this tenure and all the companies related to this sector will definitely see newer heights in the coming times.
5. Rural theme: Government is ‘ walking the talk’ in terms of the rural support which they promised earlier, which will increase the disposable income of the rural India, all the rural economy led stocks may be agriculture, irrigation, tractor, 2 wheelers, pesticides, etc will post a good show in the coming times.
So, it is the right time for an investor to do an introspective or visit a registered investment advisor, to ‘MODI’-FY his investment portfolio to gain the maximum traction out of this re-elected government and its policies.
Happy Investing