PSU stocks hogged limelight on Dalal Street on November 25 after BJP-led Mahayuti alliance's triumphant victory in the Maharashtra Assembly elections. Shares of PFC, IRFC, BEL, Central Bank of India, RVNL, Bharat Dynamics, NBCC (India), GAIL, Concor Corporation of India, SAIL, among others surged in the range of 3-8 percent in an overall strong market.
The rally was driven by strong comprehensive win of BJP-led alliance in Maharashtra, which added to confidence of market participants. The BJP-led alliance crossed 200-mark out of 288 seats in Maharashtra state elections, bringing in renewed focus on infrastructure development.
This is the best-ever performance by a party/alliance in Maharashtra since 1990. The BJP has bettered its previous high of 122 seats won in 2014 state elections.
The magnitude of victory is unprecedented in many sense - a vote share of ~50 percent for the winning alliance is a huge gap of 15 percent compared to opposition's vote share of 35 percent. It has been a comprehensive victory across all six regions of Maharashtra, with the NDA winning 70-87 percent of seats in all regions, barring Mumbai, where it won 64 percent of seats, an unprecedented 91 percent hit rate for the BJP.
First time in six decades in Maharashtra, an opposition party has failed to secure 10 percent of seats which is a pre-requisite for appointing a Leader of Opposition in the assembly.
With elections now behind and the BJP getting a strong boost from Haryana and Maharashtra elections, analysts at Motilal Oswal expect the government to now focus on spending.
"This poll result, coupled with a recovery in rural spending (on the back of good monsoon and expected strong Kharif output) should improve the demand narrative at the margin. We also expect modest recovery in corporate earnings in second half of FY25E," the brokerage firm affirmed, picking out BFSI, capital goods, and realty as their top picks.
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