Cement, roads and construction, rural consumption (rural-focused FMCG companies) and public sector banks are set to benefit as the new administration begins its second innings.
With the BJP government returning to power, the focus on key sectoral themes is likely to be sustained. Cement, roads and construction, rural consumption (rural-focused FMCG companies) and public sector banks are set to benefit as the new administration begins its second innings - with a stronger mandate. The government ordered construction of about 30,000 km of road length in FY19, up from 5,056 km in FY14. Also, execution of order books improved, which boosted the construction of roads per km per day to 27 in FY19 from 11.7 km in FY14.
In the next five years, the government plans to build 30,000 km of roads, which should boost earnings of cement, roads, and construction companies, while leaving a multiplier effect on the rural economy. ET Intelligence Group lists companies that are likely to benefit under the new BJP government. Companies in these sectors are showing signs of earnings improvement in the fourth quarter of FY19.
