The day after a grand swearing-in ceremony, the Modi government alloted portfolios to its key cabinet ministers on May 31 and these ministers have taken a charge of their sectors immediately.
Among key ministries, Nirmala Sitharaman became Finance Minister which was a surprise to everyone on Dalal Street while BJP President Amit Shah is now Home Minister.
Rajnath Singh is the Defence Minister and Piyush Goyal holds the Commerce and Railway Ministry. Nitin Gadkari retained the Roads, Transport and Highways Ministry and got the MSME Ministry as well.
After a lot of reforms announced in the first term and as the new cabinet got down to work in PM Modi's second term, the Street is hopeful that the NDA government will address issues including the liquidity crisis, consumption and economic growth, farmers' distress, infrastructure spending and the ongoing jobs crisis.
Any potential growth could result in stronger earnings and ultimately spark a rally across sectors. Hence, there are stocks which could benefit from these reforms in the coming years.
Here is a list of key stocks to watch out for after cabinet portfolio allocation highlighted by Sameer Kalra, Equity Research Analyst and Founder Target Investing:
Bharat Electronics, Larsen & Toubro: Positive
Ministry Of Defence Minister: Raj Nath Singh
The ministry gets another strong leader who has experience and was involved with critical decisions when he was the Home Minister. We expect big movements in terms of order executions and new orders as the next five years have a delivery scheduled of many critical orders.
PNC Infratech, Larsen & Toubro: Positive
Ministry of Roads & Transport / Ministry of MSME Minister: Nitin Jairam Gadkari
The progress made will only increase as road and highway remain with the same minister who is aware of the requirements. MSME ministry, which takes care of the backbone of the country in terms of labour employment, will address the issues more quickly.
Deepak Nitrite, Coromandel International: Positive
Ministry of Chemical & Fertilizers Minister: D V Sadananda Gowda
As the focus of the government is to increase exports, the chemical industry will be a crucial part of this strategy. Since farmer income is also in focus, the main input, i.e. fertiliser output, and prices are critical.
Axis Bank, Canara Bank: Positive
Ministry of Finance Minister: Nirmala Sitharaman
According to us, Sitharaman is the best replacement of the previous FM as she has been a strong minister in the previous cabinet and welcomes all stakeholders' view in deciding critical policies for example when the defence procurement policy was to be changed.
ITC: Negative
Ministry of Health & Family Welfare/Science & Technology /Earth Science Minister: Harsh Vardhan
He was first appointed at this position in 2014 and removed in the re-shuffle. Healthcare is a focus of the new Modi government and one of the most important sectors which needs a big push.
Praj Industries, Petronet LNG: Positive
Ministry of Oil & Gas / Ministry of Steel Minister: Dharmendra Pradhan
The Oil and Gas Ministry got the same minister, as the policy to lower oil imports is a top priority that needs continuity and a focus on ethanol blending. The steel sector has the biggest problem of under-utilized capacity with lower demand due to global tensions and local slowdown along with dumping by China.
Balrampur Chini Mills: Positive
Ministry of Agriculture & Farmer Welfare / Rural Development/Panchayat Raj Minister: Narendra Singh Tomar
One of the key promises of the Modi government is to double farmers' income by 2022, along with recent income distribution scheme which needs corrections. The new Minister has a good execution history under the previous ministry of urban development.
NBCC: Positive
MoS (Independent Charge) Housing / Aviation Minister: Hardeep Singh Puri
The ambitious scheme of the Modi govt to get housing for all by 2022 would see closure with Puri's second stint in the ministry. As MoS for Ministry of Aviation Puri will report directly to PM Modi. This is critical as airports and airlines are going to be a lifeline of the citizens. Air India divestment and Jet Airways crisis are the short term targets.
Torrent Power: Positive
MoS (Independent Charge) Power / Renewable Energy Minister: Raj Kumar Singh
Renewable energy and power is important as India is in the middle of taking a big jump towards sustainable power and power generation to provide supply 24x7. The receivable issues of companies and debt concerns will be the short term targets for the ministry.
Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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