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Prime Minister Narendra Modi unveiled the Sankalpa Patra (Manifesto) of the Bhartiya Janata Party (BJP), titled “Modi ki Guarantee 2024” for the 2024 Loksabha Elections. As per various opinion polls, the BJP is expected to retain power for the third consecutive term with a full majority. In this note we look at the key sectorwise takeaways from the manifesto that promises policy continuity with an overarching aim of making India the world’s third-largest economy without taking eyes off macroeconomic balance or succumbing to the lures of competitive populism. The manifesto reflects the confidence of the current dispensation to return to power and thus refrains from any meaningful freebies, which would have extracted a fiscal cost.

Capex, manufacturing and infra push to continue

Prime Minister Narendra Modi-led BJP in its 2024 manifesto emphasized policy continuity, better execution and widening the scope of existing priorities (Housing, Ayushman Bharat, Physical and Digital Infrastructure), along with some big-bang political agenda, such as Uniform Civil Code, Implementation of Citizenship Amendment Act and One Nation, One Election. The manifesto focuses on broadbased development through various government programs and initiatives that will have socio-economic impacts. Infrastructure development (Roads, Railways, Airports, Metros, Inland Waterways, Shipping), manufacturing (developing India as Global Manufacturing Hub) and capex will remain the key priorities. On the social front, the BJP plans to continue to provide free ration for the next five years under PMGKAY, double the limit of Mudra loans to INR2m and expand the scope of Ayushman Bharat to cover senior citizens. Interestingly, it also mentions the “Neo Middle Class” population and emphasizes providing them with quality healthcare and education, along with fulfilling their dream of owning a home. Key economic proposals include the focus on building India as a key manufacturing hub (Electronics, Defense, Aviation, Railways, Renewable Energy), strengthening digital and physical infrastructure, and empowering MSMEs. Providing piped natural gas connections to all major cities and towns is outlined as another priority.

India in a mini-Goldilocks!

India is in a mini-Goldilocks set-up, with solid macro (GDP, inflation, CAD, stable currency) and resilient micros (Corporate earnings). Moreover, the expectations of political continuity with an acceleration in policy momentum (as promised in the BJP manifesto) in the potential third term of the BJP under PM Modi augur well for markets for the short to medium term, in our view. The Nifty is trading well within its long-period average P/E of ~20x FY25E EPS. We continue to stay OW on domestic cyclicals, e.g., BFSI, Industrials, Real Estate and Consumer Discretionary, and maintain UW on IT with Equal Weight on Healthcare, Automobile, Metals, O&G and Telecom.

MOFSL Top Ideas:

Large caps: ICICI Bank, SBI, L&T, TITAN, ITC, HCL Tech, Coal India, M&M, Zomato, and Hindalco. Mid-caps: Indian Hotels, Godrej Properties, Global Health, PNB Housing, KOEL, Cello World, Sobha, Lemon Tree Hotel, KEI Industries & JK Cement.

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