Manifestos: Between The Substance And The Rhetoric

In my last editorial, I had mentioned why the nations electorate seems to be swayed by the NaMo wave. The overwhelming feeling of getting a new leader who understands the need for growth and proactive leadership is what people are reportedly voting for. Governance has taken a serious beating in the past five years and the current Elections are being looked upon as an event that can change the fortunes of India as a nation.

Election manifestos reflect the ideology and the intent of the party, which is seeking mandate for ruling the country for a full term. We have compiled the important takeaways from the two largest party’s manifesto to give an insight on what is in store for our country in the near future

The expected outcomes of our elections have fuelled the indices based on the progressive manifesto of the BJP. This speculative stance taken by the market is about to confront the choice of the largest democracy. Thus this period is going to be filled with anxiety and may lead to some volatility as nerves begin to shake. The trigger for this is a simple question “What if the most desirable outcome does not materialize?”

Our cover story in this issue is meant to help our readers understand the possible reactions of the market under the three most likely scenarios that could emerge post May 16. The story seeks to build the behavior of the markets in the face of the most optimistic (300 + Seats for the NDA), the most likely (250 Seats for the NDA) and the worst-case scenario (Just about 200 Seats for the NDA) that could unfold from the results of the General Elections. While on one hand this will guide you on how much to react to any euphoria that may erupt on the most optimistic or the most likely scenarios coming into play it will also help you weather any storm that could possibly come your way on the third and the most pessimistic scenario unfolding. In any of these possible three scenarios we would yet like to advise our readers to book profits now, when the markets are breaking their record highs and stay liquid till the results day. The market will surely correct and will give everyone an opportunity to enter once again at more reasonable valuations. This will also help you in retaining the choice

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of being in the market or out based on the election outcomes.

This time our Choice Scrip is Finolex Industries. This company is the largest PVC pipes manufacturer, and is shifting focus from the PVC resin business to the high growth PVC pipes and fittings business, which will enhance its overall margins and ROCEs going forward. With renewed focus on further strengthening its distributor network the stock looks to be an ideal candidate for a good rise going forward.

The Low Priced scrip for this issue is IFB Industries. With rising disposable income, there has been a rise in the demand for fast moving consumer durables which will benefit this company going forward. Also a striking feature that puts this stock high on our radar is the fact that it is a debt free company and is expanding in the overseas markets. Read on to know more. The largest liquor company in the world Diageo has bid for an additional 26 per cent stake in United Spirits. We analyse this open offer and what it holds for retail investors.

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