Modi Stocks To Buy: CLSA Revises India Portfolio; Not BEL OR L&T, But Likes 2 Top Oil & Gas Stocks

An hattrick win but with a not-so-majority seats by NDA government has led global brokerage CLSA to revise its India portfolio, on concerns of de-rating due to expensive capex stocks. CLSA is taking a of more defensive approach, with downgrading in Bharat Electronics and replacing Larsen & Toubro with HCL Tech. But the key highlight of the CLSA's India-focused portfolio is top two oil and gas stocks Reliance and ONGC.

CLSA said, its exposure to Modi stocks is limited to ONGC and Reliance as these have rerated by less than 15% in the last six months. The brokerage said they fear de-rating in the expensive discretionary and capex space and prefer the valuation support in private banks.

Before the election verdict, CLSA had identified 54 companies which are perceived as direct beneficiaries of PM Modi's policies-half of these are PSUs. Remarkably, 90% of Modi stocks have beaten the Nifty in the election-focused rally over the past six months versus only 42% of the other companies outperforming. This
may continue in the case of a strong election result. L&T, NTPC, NHPC, PFC, ONGC, IGL, MAHGL, Bharti Airtel, Indus Towers and Reliance are the preferred Modi stocks for CLSA analysts.