With Nifty expecting 24,500 positive election results, Emkay recommends balanced investments in these sectors

As India enters the final phase of voting and waits with bated breath for the general election results, experts are betting that the market will surge in the event of a favorable outcome, i.e. Prime Minister Narendra Modi’s BJP-NDA wins with a clear majority.

Manish Sonthalia, chief investment officer, Emkay Investment Managers, predicts that the Nifty index may rise to 24.5 thousand. until December 2024, assuming no negative surprises after the election results. It expects the Nifty tally to grow to as high as 26,500 by fiscal 2026.

He advises on a balanced investment strategy between large and mid-cap companies, covering key growth in BFSI, PSUs, industrials, infrastructure, energy and pharma revival.

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Market expects 330 seats for NDA; here’s how it might react in different scenarios

“The market is broadly predicting around 330 seats in the NDA. If this happens, we likely won’t see a significant initial reaction. However, markets will need time to digest these numbers and the next key area of ​​concern will be the budget,” Sonthalia said during the webinar.

He noted that if the NDA wins 370-400 seats, the market sentiment will become extremely euphoric. Conversely, if the NDA wins less than 300 seats, it will negatively surprise the market.

Sonthalia emphasized that the market is now more focused on domestic issues. If the current government continues its work, potential reforms in land, labor and the judiciary could be on the agenda. Financial inclusion reforms and improving ease of doing business are key areas that foreign institutional investors (FIIs) will monitor closely.

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Investors are advised to follow a balanced strategy by considering these sectors

He expects the Nifty 50 to register earnings growth of almost 15 per cent in FY25 and FY26. He advised investors to balance their investments between large-cap and mid-cap stocks to take advantage of the widespread rally in the Indian equity market. “In the medium to short term, most of the delta will come from the broader market,” Sonthalia said.

Sonthalia sees higher growth in the BFSI (banking, financial services and insurance) and PSU (public sector undertakings) segments. Industry, infrastructure and energy are also in focus. “The pharmaceutical industry, which experienced a slump after Covid-19, is expected to make a significant comeback,” he added. He expressed caution on commodities due to the inflationary environment.

Sonthalia also noted that the consumer goods sector is one to watch closely as the premium segment is performing well and rural recovery is on the horizon. However, stock valuations in this sector are expected to remain high.

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