Stocks to Buy During Elections

Investing in stocks during elections: Seven stocks to watch for impressive returns.

Published Oct 4, 2024 4 Min Read

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During election periods, the Indian government boosts its spending, especially in rural areas and small-to-medium enterprises (SMEs). This spending positively impacts sectors like FMCG, automobiles, consumer durables, electronics, and financial services. As a result, companies operating in these sectors benefit from government schemes, which improve their sales and profits.

By investing in some good stocks during elections, investors can benefit and achieve better returns. In this article, we cover the seven players operating in these sectors. You can look out for them during election periods.

Key takeaways

Government spending during elections benefits sectors like FMCG, automobiles, consumer durables, and financial services.
This boosts sales and profits for companies operating in these industries.
Some of the good stocks during elections are Mahindra & Mahindra, ITC, Colgate Palmolive, Hindustan Unilever, ICICI Bank, SBI, and Maruti Suzuki.

7 stocks you can invest in during elections

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Below is a list of the seven stocks that you can track and preferably invest in during the election period:

1. Mahindra and Mahindra

P/E ratio	Market capitalisation	Price-to-book (PB) ratio
33.23	Rs. 3,66,946 crore	4.49

(Data as of September 22, 2024)

Mahindra & Mahindra Ltd. is a large company in the auto sector. It was established in 1945. The company makes and sells various vehicles like LMV (light, medium, and heavy):

Commercial vehicles
Jeeps
Passenger cars

For the quarter ending June 2024, the company reported a total income of Rs. 37,626.49 crore. This figure was up 5.08% from the previous quarter and 8.44% from the same quarter last year. Also, the company made a net profit of Rs. 3,221.34 crore.

2. ITC

P/E ratio	Market capitalisation	Price-to-book (PB) ratio
31.41	Rs. 6,42,214 crores	8.47

(Data as of September 22, 2024)

ITC Ltd. was founded in 1910. It is a large company primarily operating in the FMCG and tobacco sector. The company generates most of its revenue from products like:

Packaged food
Paper
Agricultural goods
Unmanufactured tobacco
Printed materials

For the quarter ending June 2024, ITC reported a total income of Rs. 19,152.21 crore. This marks a 2.93% increase from the previous quarter and a 7.07% rise compared to the same period last year. Also, the company posted a net profit of Rs. 5,169.37 crore.

3. Colgate Palmolive

P/E ratio	Market capitalisation	Price-to-book (PB) ratio
70.41	Rs. 99,553.54 crores	296.55

(Data as of September 22, 2024)

Colgate-Palmolive (India) Ltd. is a good stocks during elections. The company was established in 1937 and primarily earns revenue from products in:

Personal care
Services
Scrap sales

For the quarter ending June 2024, the company reported a total income of Rs. 1,520.11 crore. This is a slight increase of 0.49% from the previous quarter and a 13.56% rise compared to the same period last year. Also, Colgate-Palmolive posted a net profit of Rs. 363.98 crore.

4. Hindustan Unilever (HUL)

P/E ratio	Market capitalisation	Price-to-book (PB) ratio
67.71	Rs. 6,99,614 crores	13.30

(Data as of September 22, 2024)

Hindustan Unilever Ltd. (HUL) was founded in 1933. Again, it is a large FMCG company that sells mainly “personal care” items. For the quarter ending June 2024, HUL reported a total income of Rs. 15,964 crore. This marks a 3.39% increase from the previous quarter and a 1.82% rise compared to the same quarter last year. The company also posted a net profit of Rs. 2,614 crore.

5. ICICI Bank

P/E ratio	Market capitalisation	Price-to-book (PB) ratio
20.31	Rs. 9,41,758 crores	3.38

(Data as of September 22, 2024)

ICICI Bank Ltd. was founded in 1994. It is a major private banking company that generates revenue through:

Interest on loans
Investments
Balances with the RBI

For the quarter ending June 2024, the bank's total income was Rs. 67,270.06 crore, which is a slight 0.13% increase from the previous quarter and a 29.16% rise from the same quarter last year. Also, ICICI Bank earned a net profit of Rs. 11,695.84 crore.

6. State Bank of India (SBI)

P/E ratio	Market capitalisation	Price-to-book (PB) ratio
10.12	Rs. 6,97,636 crores	1.64

(Data as of September 22, 2024)

State Bank of India (SBI) was established in 1955 and is also a major public sector bank. For the quarter ending June 2024, the bank’s total income was Rs. 1,52,125.05 crore. This figure is down 7.76% from the last quarter but up 14.96% compared to the same quarter last year. Also, SBI posted a net profit of Rs. 19,324.96 crore.

7. Maruti Suzuki

P/E ratio	Market capitalisation	Price-to-book (PB) ratio
27.01	Rs. 3,96,603 crores	4.53

(Data as of September 22, 2024)

Maruti Suzuki India Ltd. was established in 1981 and is a large company operating in the auto sector. It earns revenue by selling:

Passenger cars
Utility vehicles
Spare parts
Automobile services

For the quarter ending June 2024, Maruti Suzuki reported a total income of Rs. 36,839.90 crore. This figure marks a 7.10% drop from the previous quarter but a 10.57% increase compared to the same period last year. Moreover, the company made a net profit of Rs. 3,702.10 crore.

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Frequently asked questions

How to pick the good stocks during elections?

During elections, the government increases spending, particularly in rural areas and SME sectors. This boosts demand and benefits companies operating in industries like FMCG, automobiles, and financial services. By investing in such stocks, you can get better returns.

What are some of the good stocks during the elections?

You can watch out for ICICI Bank, Maruti Suzuki, ITC, HUL, and more. However, while investing, perform your own research and put money as per your risk appetite.

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