Ahead of Lok Sabha Election Results, Ambareesh Baliga is Bullish on This Multibagger PSU Stock
As India anticipates the outcome of the ongoing Lok Sabha elections due on June 4, investors are keenly looking for investment opportunities in the stock market. With headline indices Sensex and Nifty50 making volatile moves near their all-time highs, analysts are identifying stocks that could benefit from the election theme. Independent market analyst Ambareesh Baliga is particularly bullish on Bank of Maharashtra (MAHABANK), recommending it as a valuable addition to investment portfolios ahead of the election results.
Bank of Maharashtra’s Recent Performance
Bank of Maharashtra has rewarded its investors handsomely over the past year, delivering a return of over 140%. In 2024 alone, the stock has surged by almost 51%, significantly outperforming the Nifty Bank index, which has seen gains of around 11% and 2% in the same periods, respectively.
Why Invest in Bank of Maharashtra Now?
Baliga highlights several reasons for his positive outlook on the PSU bank:
Established Legacy: Founded in 1935, Bank of Maharashtra is a well-established public sector bank with a vast network of over 2,500 branches.
Steady Growth: The bank has shown a consistent upward trend in performance over the past four years.
Record Profits: In Q4 FY24, the bank achieved its highest-ever quarterly net profit, with a remarkable 37% year-on-year growth, surpassing analysts’ expectations.
Increased Deposits: The bank saw a 16% increase in deposits, reaching approximately Rs 4,75,000 crore.
Expansion: It has expanded its reach by adding around 88 new branches.
Improved Asset Quality: The bank has shown notable improvement in asset quality during the March quarter.
Future Earnings: The expected EPS for FY26 is around 8.5.
Share Price Target
Baliga recommends buying Bank of Maharashtra shares with a one-year target price of Rs 85, implying an upside of 20.4% from its closing price on May 27.
Investment Strategies Amid Election Results
As the election results approach, experts have varied views on market strategies. Suman Bannerjee, CIO of Hedonova, advises building diversified portfolios rather than attempting to time the market or concentrate investments based on recent trends. He cautions against relying on election predictions due to the inherent uncertainties of political and economic landscapes.
Aamar Deo Singh, Senior VP – Research at Angel One, suggests that long-term investors can hold onto PSU stocks given their strong performance. However, he advises partial profit-booking due to potential market turbulence from geopolitical tensions, Lok Sabha elections, and the upcoming US Presidential elections. Singh recommends avoiding fresh entries at current levels but suggests adding these stocks during corrections for a long-term perspective.
Market Outlook Post-Election
Ranjan Sinha, senior . research analyst at Bonanza Portfolio, expects the BJP-led NDA alliance to retain power, continuing PM Modi’s reform processes. He advises investors to stay invested and use market dips to accumulate strong India-focused stocks.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, cautions traders about the risks in the near term and recommends buying large-cap stocks on declines. He notes that the market could react sharply to any early clues about the election results.
JM Financial’s Perspective
JM Financial, in its India Strategy report, anticipates the BJP will comfortably retain its majority. The brokerage expects policy continuity and sees opportunities in defense and capital goods sectors, with valuation comfort in private banks and consumer stocks. They predict that large-cap stocks will outperform small- and mid-cap stocks in the post-election cycle.
Disclaimer
The information provided in this article is for informational purposes only and does not constitute financial advice. Investing in the stock market involves risk, including the loss of principal. Always conduct thorough research or consult a qualified financial advisor before making any investment decisions. The opinions expressed are those of the author and do not necessarily reflect the views of any associated entities. Past performance is not indicative of future results.
