General Elections 2024: Infra, manufacturing and other sectors in focus after BJP releases its manifesto

The Bharatiya Janata Party's (BJP) manifesto for General Elections 2024 has a strong positive read-through for Indian equities, said brokerage house Emkay in a recent report.

On Sunday, April 14, Prime Minister Narendra Modi unveiled the Bharatiya Janata Party's manifesto, titled "Sankalp Patra," for the upcoming Lok Sabha Elections of 2024. As PM Modi embarks on a historic bid for a third term, the BJP has set ambitious targets, aiming for 370 seats for the party and 400 seats for the National Democratic Alliance (NDA) in the Lok Sabha. The seven-phase Lok Sabha Election 2024 is scheduled to commence on April 19, with the results set to be announced on June 4.

As per the Emkay report, the BJP, expected to sweep the upcoming polls, emphasises continuity in its reform agenda while preserving focus on financial macro stability.

Read here: BJP Manifesto Lok Sabha polls 2024: Tata Motors, Dabur, Bajaj Finance among stocks that can benefit

Capital Goods (railways/defence), Housing/Mortgages, Tourism, and Aviation are direct beneficiaries, while Textiles and Pharma API are probable winners, stated Emkay. The brokerage has maintained its medium-term positive outlook on the market, with a preference for infrastructure and manufacturing sectors and a focus on SMID.

BJP manifesto

The brokerage noted that the manifesto underlines the commitment of the new government to uphold macro-financial stability, a crucial objective with significant implications. It's no surprise, given the BJP's track record of conservatism, which has fostered remarkable concurrent strength in fiscal and current account deficits, as well as the balance sheets of banks and corporates, it said. Sustaining this equilibrium is vital for fostering consistent macroeconomic growth in India, as per the brokerage.

Read here: How macroeconomic factors like equities, FPIs, inflation this year compare with 2019 polls

Infra push to press on

The brokerage also highlighted that the manifesto pledges to sustain the momentum of the state-led infrastructure push observed in recent years. Ambitious targets include the construction of over 5,000 kilometers of railway tracks annually and the development of 15,000 kilometers of access-controlled highways.

Notably, the manifesto emphasises electric vehicle (EV) charging infrastructure on two occasions. Moreover, there is a renewed commitment to green initiatives, encompassing the goal of achieving 500GW of renewable energy, advancing the Green Energy Corridor project, and ramping up Green Hydrogen production.

Regarding housing, there is a clear emphasis on affordable segments, with promises to reinforce the Real Estate (Regulation and Development) Act (RERA), establish new satellite townships, eradicate slums, and continue the Pradhan Mantri Awas Yojana (PM-AWAS) scheme. The brokerage believes that the government will likely continue to shoulder a significant portion of the infrastructure-building burden, excluding housing. Clarity on funding mechanisms is anticipated in the budget, with asset monetisation expected to play a pivotal role, given the trajectory of fiscal deficit consolidation, it added.

Read here: An upmove seems more likely than a correction ahead of polls, says Shauryam Gupta of Rupeezy

More legs to the manufacturing theme

The brokerage further observed the BJP's intensified focus on bolstering the manufacturing sector. The party aims to establish global hubs for automotive/EVs, electronics/semiconductors, and railways, among other key areas. The strategy to localise defence manufacturing remains a cornerstone.

Of particular interest are two sections in the manifesto: i) textiles—an area where India has historically seen limited success but offers substantial employment-generation potential; and ii) active pharmaceutical ingredient (API) manufacturing—where India possesses inherent advantages and a rich history.

Additionally, there is a concerted effort to strengthen India's position as an aviation hub. The brokerage anticipates that the manufacturing sector will continue its stellar performance, driven by coordinated policy initiatives and the global trend of supply-chain diversification. It maintains a preference for asset-heavy manufacturing companies over asset-light services players in light of these developments.

Read here: Expert view: Expect moderate gains in 6-12 months; General Election key trigger

Social sector – quality over quantity

The brokerage further noticed that in its manifesto, the BJP continues to advocate for an outcome-based approach in the social sector rather than relying on subsidy-driven targets. Key areas of focus include improving the quality of life by ensuring access to piped water and LPG connections. The promise of zero electricity bills is expected to be fulfilled through the adoption of renewable energy rather than cash transfers. The commitment to reducing healthcare costs is likely to be upheld through continued support for state insurance schemes rather than direct price controls. The emphasis appears to be on enhancing the efficiency of every rupee spent, rather than jeopardising fiscal balance through excessive spending, it added.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.