'Ambitious targets worked in BJP's favour': JM on elections 2024 strategy, stocks to watch

The strategy of setting ambitious targets of '400 paar' worked in BJP's favour, as it became a major talking point in the absence of a strong wave, as was the case in 2014 and 2019, said Hitesh Suvarna of JM Financial Securities. The strategy was tactfully aimed at warding off complacency among BJP and NDA (National Democratic Alliance) cadres, Suvarna said in a strategy note.

His brokerage felt the opposition’s focus on local issues has been successful in gaining mindshare and is likely to convert to votes and that the extent of damage in Karnataka will decide the tilt towards populist policy, going forward.

JM said the undercurrent of local issues raised by the opposition is noticeable this time but the impact is likely to be felt more in states like Karnataka and Haryana, reflecting in lower seats for the BJP. 

"Our  interaction with locals indicates that BJP’s political experiment in Maharashtra did not go down well with voters. A section of the voters labelled the split in the Shiv Sena and the  NCP (nationalist Congress Party) as unethical; if this sympathy wave plays out, it is likely to  favour the Shiv Sena (Uddhav Thackeray) faction and help the MVA (Maha Vikas Aghadi) alliance secure a majority of the Lok Sabha seats in the state," JM Financial said in a note.

"The BJP’s target of securing  double-digit seats in Tamil Nadu looks optimistic due to lack of local infra vs. DMK; we are building in 5 seat wins in the state. Our assessment of lower margin (

For now, JM Financial is building in a loss of 3-5 seats in the state. Among the major states, JM expects votes to swing in Maharashtra (down 8 seats), West Bengal (up 4) and Tamil Nadu (up 5 seats). 

"Based on our assessment of major states on Pan India basis, we see a net incremental loss of 4 seats to 299 for BJP in our base case while our bear and bull case seat tally is in a narrow range of 290 to 310," JM Financial said.

Strategy: Stocks to watch 
JM Financial said a policy continuity will ensure opportunities in defence and capital goods space while valuation comfort is available in private banks and consumers. 

Unlike in the past, JM Financial expects large caps to outperform SMIDs in this post-election cycle. "We expect healthy gains to follow election results on 4th June, and we believe any dips should  be bought into. Policy continuity will ensure that the government’s main focus will remain on  infrastructure development and manufacturing, which will benefit sectors in defence and capital goods space," it said.