Cement, infra are key sectors to look at because of prospect of policy continuity: Pankaj Pandey
Pankaj Pandey, Head Research, ICICIdirect.com, says if the incumbent government gets a simple kind of a majority, it could be a non-event for the market. The focus, again, will shift towards the earning side or the kind of announcements that one would expect in the Budget or subsequent policy announcements in various sectors. That will hold the key and that is where we are largely focusing upon.
Pandey also says that since the monsoon expectation is also good, the focus will shift towards the overall infra spend side and cement is one sector where we have not seen much of a price performance. He likes key players like ACC, Ambuja, UltraTech or JK Cement which he says are going to experience a slightly better growth rate than the industry.
Let us do a scenario analysis. If indeed, the BJP comes back to power with a reasonable majority, it may not be a thumping majority like 400, but a reasonable majority. At the end of the day, will the market dissect the quality of the win, just the way it dissects the quality of earnings or do you think net-net if they come back with a majority, it should be enough for bulls to come back to the Street in a big way?
Pankaj Pandey: From the market perspective, the overall sense is that policy continuity is the single most important risk factor and I think for that only majority or simple majority is required. So, to keep markets where they are at current levels, a simple majority will do. In case you get a lot more higher numbers, that is where probably the excitement can sort of
