After Modi's Win, These Stocks Picked by India's Top Investors Are Poised for Big Gains - The 5 Minute WrapUp by Equitymaster
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After Modi's Win, These Stocks Picked by India's Top Investors Are Poised for Big Gains

May 24, 2019

Radhika Pandit, Research Analyst

India has voted. The verdict is in. And what a clear one it is.

The BJP-led NDA received a thumping majority. A second time. That's quite a record.

Modi's magic has worked big time.

The Indian stock markets certainly agreed and the Sensex crossed the 40,000 mark first time ever.

What's next?

With the uncertainty of elections out of the way, Modi's phenomenal victory might speed up Sensex 100,000.

If the Modi government delves headlong into giving the economy a huge boost, then earnings growth will certainly bolster the Sensex as well.

That is why it is more important than ever to invest in the right stocks...the ones that will benefit the most. It's a big opportunity.

And what better way to do that than to see what some of India's top investors are doing?

We call them - Super Investors.

They are not like the aam investor. They are people whose investing decisions have made them wealthy. They're part of an exclusive investing club.

Of course, these investors have poured money into businesses for the long haul. Their buying decisions may not necessarily be influenced by the election results.

However, there is no denying that many stocks that are already part of their portfolios are poised to record healthy gains.

Riding on their successes is certainly a great way to make money from the markets.

But even from their portfolios, you need to know which are the best to buy.

Sarvajeet and I have hit upon the perfect strategy. We have our very own Smart Money Score, which filters the best stocks from the portfolios of around 40 super investors.

We have already recommended more than 20 stocks in Smart Money Secrets so far.

And we are all set to release our next recommendation. It's a stock in the banking space.

Sarvajeet already wrote to you regarding this. Here's what he said:

  • There's a lot of uncertainty regarding ongoing NPA issues, the government's plan for infusing further capital, etc.

    So, from the rest, our preference were banks that have a strong liability franchise, diversified loan book, and good asset quality.

    And we have finally found such a bank to recommend to our subscribers.

    This bank was on our shortlist for quite some time. But due to some asset quality concerns, we didn't recommend it.

    Finally, we see clarity on the asset quality issue going forward.

    Importantly, the bank is trading at reasonable valuations.

    The potential upside in this stock is more than 40%.

Sarvajeet and I will publish the recommendation report for subscribers on Monday, 27 May.

If you haven't subscribed to Smart Money Secrets yet, you can sign up here.

Chart of the Day

It is interesting to see how the Sensex reacted in 2-3 days immediately after the election results were out over the years.

In 2004, it was expected that the BJP-led NDA combine would win, and the markets seemed to have factored that.

However, BJP's slogan then 'India Shining' and 'Feel Good Factor' failed to enthuse the people of India, and the reverse happened. The Congress-led UPA won the elections. The stock markets did not take this too well.

However, in 2009, the UPA won by a clear majority and the stock markets gave a big thumbs up. A lot was expected from the erstwhile PM Manmohan Singh at the time, and India's economy grew at a scorching pace since then.

However, it's in the second term of the UPA government that corruption, rot, and general apathy set in. The economy slowed down.

And the Modi-led NDA gained a thumping majority in 2014.

Indeed, in the run-up to the 2014 elections, the Sensex was already notching up gains, and the bull run continued for the rest of that year as well.

Today, the BJP clinched a roaring victory just like it did five years ago. The Sensex briefly touched the 40,000 mark, paving the way for Sensex 100,000.

How the Sensex Reacted in Days Immediately After Election Results

Warm regards,

Radhika Pandit
Radhika Pandit
Co-editor and Research Analyst, Smart Money Secrets

PS: Radhika Pandit and Sarvajeet Bodas, co-editors of Smart Money Secrets, are ready to recommend their next stock. If you haven't subscribed to Smart Money Secrets yet... you can do so here.

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