Andhra co stocks ride on TDP's electoral triumph

After the announcement of Lok Sabha election results, almost every political party appeared happy and satisfied. Although the BJP lost seats, it formed the government again and became the largest party for the third time. Congress is happy that its seats doubled compared to the last time. SP’s performance in UP was well-received, while TMC is pleased to have successfully pushed back BJP in West Bengal. However, TDP and JDU were happy for different reasons, as they have joined the government.

Since the election results, Chandrababu Naidu’s TDP and shares related to Andhra Pradesh have seen significant buying. This includes both Lok Sabha and Vidhan Sabha election results. TDP has made significant gains this time. In just 12 days, shares of Heritage Foods have doubled, from ₹354.50 on May 23 to ₹696 on June 10. This has increased the wealth of the Naidu family, who hold a 35.71% stake in the company, by ₹1,132 crores. Apart from this, which companies are expected to benefit significantly from TDP’s role in the central government? Should one invest in these companies’ shares now? Let’s find out.

Since the election results, shares related to Andhra Pradesh have seen a rise of up to 7.50% in just 4 days. KCP Ltd saw the highest increase of almost 50%, followed by Crane Infrastructure at 40%, Amara Raja at over 32%, Andhra Petro at 32%, Avanti Feeds at 28%, Andhra Cements at 24%, Virat Crane Industries at 23%, Andhra Sugars at 21%, Kallam Textiles at 19%, Nelcast at 13%, Laurus Lab at 10%, and Manoj Vaibhav Gems at 7%.

Amravati-based KCP Ltd is involved in cement, sugar, hospitality, and engineering businesses. The company derives over 95% of its revenue from cement and sugar. Its engineering and hotel divisions, though smaller, are on investors’ radars.

Similarly, companies like Amara Raja, Andhra Sugars, Avanti Feeds, Laurus Labs, Nelcast, Kallam Textiles, Virat Crane Industries, Andhra Cements, Crane Infra, Manoj Vaibhav Gems, Andhra Petro, and Apex Frozen Foods either have registered offices or business units in Andhra Pradesh. Some of these companies also have direct or indirect connections with TDP or political corridors, contributing to the surge in their shares. However, should one still consider buying these shares after the recent surge, or would it be wise to wait?

According to Arun Mantri, founder of Mantri FinMart, shares of Heritage Foods and Olectra Greentech have seen significant gains, so fresh buying may not be advisable. However, investors in Heritage Foods can consider holding the shares with a stop loss at ₹600. Looking at a 6-8 month perspective, Likhita Infra can be bought on dips towards ₹558, KCP Ltd towards ₹330, KNR Constructions towards ₹480-500, Pennar Industries towards ₹225, Amara Raja towards ₹1580-1620, and NCL Industries towards ₹290.

In conclusion, significant changes have occurred in the country’s political landscape after the general election results. States like Bihar and Andhra Pradesh could receive significant benefits or incentives. Considering the changed political scenario, investors can prepare a strategy for investing in select companies related to Andhra Pradesh for at least 6-8 months.