CLSA Recommends 54 ‘Modi Stocks’ Including RIL and Zomato Ahead of Lok Sabha Elections 2024

  • Global brokerage house CLSA has identified 54 ‘Modi stocks’ as direct beneficiaries of the current government’s policies.
  • These stocks, predominantly public sector undertakings (PSUs), have been rallying in anticipation of the BJP government’s return to power.
  • CLSA predicts that stocks of India’s state-run companies might peak in June or July, ahead of the budget presentation by the new government.

Discover the top 54 ‘Modi stocks’ that are set to benefit from the current government’s policies, with insights from CLSA.

Anticipation of BJP Government’s Return Fuels Stock Rally

As the Lok Sabha election results draw closer, global brokerage house CLSA has identified 54 ‘Modi stocks’, predominantly public sector undertakings (PSUs), as “direct beneficiaries of the policies of the current government” led by Prime Minister Narendra Modi. According to the brokerage, these stocks have been rallying in anticipation of the BJP government’s return to power after the Lok Sabha poll results on June 4, 2024. The list includes many PSUs from capex and infrastructure-linked sectors. Going ahead, CLSA predicts that stocks of India’s state-run companies, or PSUs, might peak in June or July, ahead of the budget presentation by the new government, mirroring the trends observed in previous general elections.

Election-Focused Rally Outperforms Nifty Index

Furthermore, the global brokerage highlighted that over the past six months, 90 percent of the “Modi stocks” have experienced an election-focused rally, outperforming the Nifty index. The average increase for these stocks has been 50 percent or more, compared to the Nifty’s 14 percent rise. CLSA identified these 54 stocks from a pool of 183, representing 30 percent of the futures and options universe. Only five of these stocks have underperformed the benchmark in this period, it added.

Market Expectations and Potential Profit-Taking

The buildup of election-related expectations began in December, following strong state election results for the ruling party and CLSA expects this trend is likely to continue, particularly if the incumbent government returns with a strong majority. “The dominant outperformance of Modi stocks clearly suggests high expectations of a favourable election verdict outcome for the ruling party being baked into market expectations,” CLSA said. However, the global brokerage cautioned that this rally, driven by a narrow, election-themed optimism is expected to taper off by mid-2024. A few weeks after the election, CLSA anticipates investors will be greeted with a reality check that many positives would already have been priced in, in these stocks. “This may drive profit-taking by the less patient holders of Modi stocks,” it forecasted. CLSA referenced the patterns observed after the previous two elections – 2014 and 2019 – when PSU stocks peaked a few weeks after the election results in June.

Banking Stocks as a Risk-Reward Play

While CLSA estimates this “election-themed” rally will end in June or July, it sees banking stocks as the best risk-reward play in India for the second half of 2024. “A clear pushback on rate-cut expectations has allowed banks in the US to outperform year-to-date but Indian private banks have been laggards,” CLSA noted. Indian equities are expected to remain volatile in the lead-up to the Lok Sabha election exit polls on June 1 and the results on June 4.


In summary, the anticipation of the BJP government’s return has fueled a significant rally in ‘Modi stocks’, predominantly PSUs, which have outperformed the Nifty index. However, investors should be cautious as this rally might taper off by mid-2024, leading to potential profit-taking. Banking stocks are seen as a promising risk-reward play for the latter half of the year. As the election results approach, market volatility is expected to remain high, making it crucial for investors to stay informed and strategic in their investment decisions.

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Gideon Wolf
Gideon Wolf
GideonWolff is a 27-year-old technical analyst and journalist with extensive experience in the cryptocurrency industry. With a focus on technical analysis and news reporting, GideonWolff provides valuable insights on market trends and potential opportunities for both investors and those interested in the world of cryptocurrency.

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