Stock Picks Post Maharashtra, Jharkhand Elections — Mahindra, SBI And More

In the aftermath of the recent Maharashtra and Jharkhand state assembly elections, Motilal Oswal Financial Services Ltd. has identified its top stock picks, focusing on large-cap and mid-cap stocks across various sectors. The firm is optimistic about certain high-growth areas, particularly after the political outcome, which is expected to uplift market sentiment.

For large-cap stocks, Motilal Oswal has recommended these stocks:

• Mahindra & Mahindra Ltd.

• State Bank of India

• Larsen & Toubro Ltd.

• Indian Hotels Co.

• ABB

• Dixon Technologies Ltd.

• Bharti Airtel Ltd.

• Trent Ltd.

• Hindalco Industries Ltd.

• Titan Co.

• HCL Technologies Ltd.

These stocks represent diverse sectors, from financials to consumer discretionary, industrials, and technology, providing a broad exposure to India’s economic growth potential.

Among mid-cap stocks the company has picked:

• Angel One Ltd.

• BSE Ltd.

• Amber Enterprises India Ltd.

• Ipca Laboratories Ltd.

• Cummins India Ltd.

• Page Industries Ltd.

• Godrej Property Ltd.

• Coforge Ltd.

• JSW Energy Ltd.

• Gravita India Ltd.

These stocks are highlighted as promising picks. These companies are poised for growth, especially in areas like energy, pharmaceuticals, real estate, and technology services, the brokerage said.

Motilal Oswal’s preferred sectors reflect a robust economic recovery trajectory, with a particular focus on Banking, Financial Services, and Insurance, including both private and public sector banks, as well as non-lending Non-Banking Financial Companies. The firm also favours capital goods, real estate, manufacturing, consumer discretionary, IT, and healthcare, all of which are expected to benefit from favourable macroeconomic factors and government spending in the post-election phase.

The election results have played a pivotal role in shaping Motilal Oswal’s outlook. The NDA has delivered a resounding victory in Maharashtra, securing 233 of the 288 seats, significantly surpassing all expectations. This outcome is seen as a game-changer for the state, which has experienced political instability over the past few years. With a decisive win, the NDA is expected to bring governance stability and renewed focus on infrastructure development, making the state a more attractive investment destination, as per the report.

Maharashtra’s election result, coupled with the BJP’s success in Haryana, has given a substantial boost to market sentiment. The market had seen a correction in the last two months, largely due to geopolitical uncertainties, a slowdown in corporate earnings, and FII outflows. However, with the elections now behind, investors are expected to regain confidence, particularly in light of the NDA’s victory, which is seen as strengthening the government's focus on infrastructure spending and economic recovery.

Motilal Oswal also noted that the elections have provided clarity, and the government is likely to ramp up spending in the second half of fiscal 2025, especially in rural areas, with a strong monsoon and good harvest expectations. This is expected to boost demand, particularly during the upcoming wedding season, which is projected to see a 30% increase in wedding-related spending.

Corporate earnings are expected to recover modestly in the second half of fiscal 2025, with Motilal Oswal forecasting a 9% growth in its covered earnings for the second half, compared to a flat first half. The recovery in earnings, combined with a favourable political climate, is expected to trigger a mini risk-on rally, especially in large-cap stocks, which are now trading at reasonable valuations. Midcaps and smallcaps, however, are still seen as expensive, with high P/E ratios.

In contrast, the Congress-led I.N.D.I.A. alliance has retained power in Jharkhand, where the ruling Jharkhand Mukti Morcha secured a comfortable win, maintaining its hold over the state.