The year 2024 saw market fluctuations, influenced by various global events impacting the Indian stock market indirectly. With general elections occurring nationwide, investors anticipate new policies and reforms post-election.
This can be a great time to consider investing in sectors positioned for growth in the coming days. Here are the top sectors to invest in after the election to maximise profits from the stock market.
India recorded a GDP growth rate of 7.2% in 2022. With the 2024 general elections approaching, the stock market reached all-time highs, although global growth may not match this pace.
The market's sentiments appear favourable, but it’s uncertain whether this will persist post-election. Assuming the current government is re-elected, investors may consider staying invested during the election season and exploring sectors likely to surge afterwards.
Therefore, investors should assess various sectors during the election season to make informed investment decisions post-election, taking advantage of market highs as elections unfold nationwide.
Top 5 Sectors to Invest after the Election
Here are the top 5 post-election investment sectors likely to experience a significant run-up after the election.
Infrastructure
A potential return of the current government could result in significant growth in the infrastructure industryin the coming years. The government has increased the infrastructure capital expenditure for FY 2024-25 to Rs 11.1 trillion. Improved infrastructure is expected to attract foreign investments, create business opportunities, increase trade, and enhance the overall financial stability of the country.
Hence, infrastructure stocks such as , PNC Infratech, etc., are industry leaders likely to experience rapid growth after the elections.
Power and Renewable Energy
India possesses vast coal and hydroelectric power, yet there is room for growth in the power and renewable energy sector to enhance the country’s global position. The government's emphasis on rapid expansion to boost the economy makes this a prime sector post-election investment.
Moreover, the 2024 interim budget introduced the “PM Suryodaya Yojana 2024”, an allocation of Rs 10,000 crore to promote renewable energy sources like solar energy. This indicates that the power and renewable energy sector is set for significant growth in the coming years and represents one of the best post-election investment sectors to consider.
Banking and Financials
The banking sector represents a promising investment opportunity post-election. Banks play a vital role in capital allocation across sectors, making them a relatively safer investment option. Additionally, with India’s Current Account Deficit reduced to only 1% of GDP(THE 1% NUMBER IS NOT THE OFFICIAL NUMBER YET, IT IS JUST AN ESTIMATE), the banking sector has become an attractive investment avenue. While bank stocks like HDFC Bank, Kotak Mahindra Bank, etc., are experiencing slow growth, the expected interest rate cuts by the RBI will likely spur growth in the sector.
Tourism & Hospitality
The tourism and hospitality sector is set for growth following the 2024 Lok Sabha elections. Contributing significantly to India’s economy with Rs 15.7 trillion in 2022, tourism accounts for around 4.6% of the country’s total GDP.
Schemes like “Swadesh Darshan” introduced by the government indicate a favourable outlook for the sector, making it an appealing investment opportunity post-elections.
Healthcare
India’s healthcare sector presents potential investment opportunities, with programs like Modicare and Mohalla Clinics to boost the sector. Considering the significant portion of the population falling into the senior citizen category, government spending on healthcare is expected to increase. With the likelihood of the same government being re-elected, healthcare programs are expected to be among the sought-after sectors post-election.
India’s Outlook for Fiscal 2024
India’s economy is expected to thrive in FY 2024. According to the International Monetary Fund (IMF), India's GDP will likely increase by 6.8%.
Factors contributing to this optimism include:
● Growing Consumer Economy
● Increasing Demographic Dividend
● Lowering Risk Premia
● Increased Market Depth
● Low External Risks
With these factors in play, India’s outlook for fiscal year 2024 appears promising, ensuring steady growth.
Conclusion
The post-election season in India presents investment opportunities for investors to make the most of the market. Staying updated with the latest government reforms and policies can further enhance gains in your investment portfolio.
As a smart investor, you must remain prepared for the perfect time to put your money in the sought-after sectors post-election and make surplus gains with a long-term perspective.
Disclaimer: Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.
