Neither Adani, Ambani or Tata: Modi stocks is the biggest buzzword before election

While noting that 90% of have beaten in the election-focused rally over the past 6 months versus only 42% of other companies outperforming, CLSA analysts said this may continue in case of a strong result.

"However, this narrow election theme-based rally may end in June-July and we see banks as the best risk-reward India growth play in 2H24," it said.

Unlike his predecessors, PM Modi has been vocal about the success of PSUs. Last year in August, he went on to give a guru mantra to investors - buy .

"Share market mein ruchi rakhne wale ko yeh guru mantra hai ki jin sarkari companiyon ko yeh log gaali de na, aap uspe daav laga dijiye. Sab acha hi hone wala hai. (This is a guru mantra for those who have interest in stock markets - invest in PSU companies ridiculed by the Opposition and everything will be good)," he had said in Lok Sabha.

Led by attractive valuations, high dividend yields, growing order book and government's thrust towards value maximisation for 'sarkari' companies, PSU stocks have been re-rated in last couple of years.

Before his death, ace investor was also extremely bullish on PSU stocks.

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Election expectations
Dalal Street is pinning hopes on Street favourite BJP to win around 300 seats in the , the results of which will be declared on June 4. From a sector perspective, a strong BJP mandate would imply an increased focus on infrastructure spending that would be beneficial for the infrastructure-linked sectors such as industrials, capital goods, utilities, defense, cement, and real estate.

On the flip side, a weaker BJP mandate may lead to more spending on consumption and lower-income households, which broader markets may not like, though it could help consumption-led sectors perform relatively well, analysts say.

“BFSI, PSUs, and industrials are expected to do well. has led the earnings growth and seen a correction in valuation. Investment-related themes will come into play with power capex building up in the next 3 to 5 years. We are re-rating public sector units as some government entities will have an advantage in sectors such as defence, oil marketing companies, and power financers,” said Manish Sonthalia, Chief Officer, Emkay Investment Managers.

Analysts expect healthy gains to follow election results on 4th June. "We believe any dips should be bought into. After the election, markets will shift their focus to the Union Budget, which is likely to be tabled in July," JM Financial said.

Policy continuity ensures that the government’s main focus will remain on infrastructure development and manufacturing, which benefits sectors in defence and capital goods space, it added.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)