Gujarat-based co stocks make merry on Modi’s likely return

The exit polls came as a pleasant surprise for investors who took the market on Monday, on what analysts termed a ‘relief rally’.

Enthused by the clear mandate indicated by the exit polls for the Narendra Modi-led NDA government, investors took the plunge into stock-specific buying amid a sharp rally in the market. The BSE Sensex ended about 3.75 per cent up at 39,352.67 points.

The stocks of most Gujarat-based corporates ended with handsome gains on heavy buying volumes. Adani Group’s flagship Adani Enterprises shot up 27 per cent to close at ₹151.55 on the BSE, accompanied by Adani Power (15 per cent), Adani Green Energy (15 per cent), Adani Gas (13 per cent), and Adani Ports & SEZ (9 per cent).

Another leading corporate house Torrent Group saw its power arm gaining 5 per cent to close at ₹247.9, while textile giant Arvind shot up by over 8 per cent.

The rally also encompassed State-run players such as Gujarat Gas (4 per cent), GMDC (2 per cent) and GNFC (6.25 per cent) where increased investor-buying was seen.

Advantage Adani

Analysts believed that the outcome of the Australian election, coupled with exit polls for Lok Sabha, has revived investor confidence in Adani Group’s investments in Australia and India. Australian Prime Minister Scott Morrison retained power after a surprise return in the national elections. This pointed to continuation of the projects taken up by the Adani Group in the areas of mines and logistics.

“There were apprehensions about the return of the current government in Australia. Investors were worried about the future of Adani’s investments there. But with the return of the current government, there are bright prospects for the investments. The same is the case with the return of Prime Minister Narendra Modi; the investment momentum will continue,” said the Ahmedabad-based analyst of a leading broking house.

However, while the exit poll outcome indicated at continuation of the conducive business outlook in the country, worries including those related to regulatory issues saw pharma stocks failing to match the gains made by the other sectors.

“Most pharma stocks didn’t participate in the rally due to worries like the USFDA regulations,” said the analyst quoted above.

Gujarat-based pharma major registered only minor gains. Torrent Pharmaceuticals ended at ₹1,655.7, up by about 0.53 per cent; Cadila Healthcare climbed 0.38 per cent and Alembic Pharmaceuticals 0.63 per cent.