Worried about election results? Top 39 stock ideas for a ballot-proof portfolio
Investors hedge portfolios with ballot-proof stocks like HDFC Bank, Coforge, Vodafone Idea, L&T, BHEL, and Amara Raja Battery amid election volatility. Experts Sanjiv Bhasin and Kunal Bothra suggest these stocks. Prabhudas Lilladher lists 35 election-proof stocks across sectors like FMCG, auto, healthcare, IT services, banks, capital goods, commodities, and consumer durables.
As intra-day volatility is becoming more common on in the election season, risk-averse are either sitting on sidelines with sacks full of cash or using wild swings to smartly hedge their s with ballot-proof stocks.In the 2004 , when UPA had unexpectedly stormed into power, had crashed 15% in a single day. Investors fear a 2004-like repeat in case street favourite BJP doesn't retain power.
"If the changes, the one-day dip could be as much as 15% also," warns veteran Sandip Sabharwal.
However, not many are expecting a massive upside on June 4, when the would be announced, if PM Modi proves invincible for the third time in a row as most of the upside is already priced in.
“Nifty is slightly overvalued among emerging markets but nonetheless the election outcome is largely discounted and factored in the market price. Therefore, the possibility of positive surprises is less and any downside surprise is higher, which may have its own impact on the market movement,” Viraj Gandhi, CEO, SAMCO Mutual Fund, says.
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Election-proof stock portfolio
Dalal Street veteran Sanjiv Bhasin has listed 3 stocks in his election-proof portfolio - HDFC Bank, and . Both and have underperformed but given their fundamentals are expected to bounce back.
"Voda Idea is a clear place that the AB Group has got re-rated and that you cannot but make money in because at 40% of EBITDA and 142 ARPU, they can only go up. Now, despite any government or change or not, data and telecom is going to be in a very sweet spot," Bhasin said.
Market expert Kunal Bothra has picked L&T, and and Mobility in his election-proof portfolio.
"I will go with largecap names like L&T. I think that stock has been an underperformer in the last two-three months and there could be a very strong catch-up at play for L&T. The risk reward is quite attractive and the stock is continuing to exhibit patterns of higher tops and higher bottoms," he said.
Domestic brokerage firm Prabhudas Lilladher has a list of 35 stocks across sectors like FMCG, auto, healthcare, IT services, banks, capital goods, commodities, consumer durables and telecom for prudent defensive hedge against election results.
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Prabhudas' stock list of election-proof portfolio:
FMCG - HUL, Dabur, Emami, Marico, GCPL, Britannia, Varun Beverages
Auto - Hero MotoCorp, M&M, Maruti Suzuki, Eicher
Healthcare - Sun Pharma, Max Health, Lupin, Jupiter Hospitals.
IT services - TCS, LTI Mindtree, HCL Tech, Cyient
Private Banks - HDFC Bank, Kotak Mahindra Bank, Axis Bank, ICICI Bank
Capital Goods - Siemens, ABB, Schneider, Honeywell, Elantas Beck, Timken, GE T&D, Hitachi Energy
Commodities - Hindalco
Consumer Durables - Havells India, Bharti Airtel, Delhivery
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Source: Stocks-Markets-Economic Times
