CLSA keeps 2 out of 54 ‘Modi stocks’ in India focus portfolio after poll verdict

CLSA has significantly revamped its portfolio of 'Modi stocks' following the NDA coalition's weaker-than-expected mandate. Initially, 54 companies, including PSUs, were identified as direct beneficiaries of government policies. \r

However, only two stocks, ONGC and Reliance Industries, have been retained in CLSA's India focus portfolio due to their modest rerating in the past six months. CLSA noted that the upsurge in Modi stocks prior to the election was driven by a substantial re-rating in earnings multiples, signaling confidence in predictable policymaking. \r

However, with the BJP's lack of a simple majority, CLSA now questions the stability of the government and policy-making, prompting adjustments in its portfolio.