If as a stock market punter you had foreseen Narendra Modi coming to power at the start of 2014 and made your equity choices accordingly, it’s a pretty pile of cash you’d be sitting on now. The Modi stocks – listed companies seen as having an in with the Prime Minister – have, in general, outperformed impressively.

Take the biggest names, for instance. Adani Enterprises – the Adani Group’s flagship firm with interests in agribusiness, power, ports and mining and allegations of receiving land way below market rates from the State Government – went up nearly 174 per cent from February 2014 to today, compared to the BSE 100 universe, which rose 44 per cent.

The same holds true of the group’s subsidiaries. Adani Ports and SEZ rose 97 per cent, Adani Power by about 56 per cent.

The Essar Group, which has interests in steel, energy and infrastructure, and currently in the news for funding Union Transport Minister Nitin Gadkari’s French cruise en famille , is another example. Essar Oil rose 116 per cent year-on-year against a nearly 15 per cent increase in the BSE Oil and Gas sectoral index; Essar Ports moved up 126 per cent.

Gujarat Pipavav Port Ltd gained 210 per cent, though in fairness, the only yardstick you can use to compare this performance with is Essar and Adani Ports, both of which went up as well.

Reigning sentiment

A senior equity analyst with a major broking company says the long-term bets have more to do with the outsider’s perception of a company’s proximity to the government, not any tangible benefit that these businesses have actually received on the ground. Investors have gone long on businesses perceived as being ‘Gujarati.’

Torrent Power rose 104 per cent against the BSE Power sectoral index, which went up 48 per cent. Tata Power – seen as a politically-neutral company – rose 14 per cent in the same period.

A defensive sector such as pharmaceuticals did well over the last year, with BSE Healthcare gaining 46 per cent. Hint at a Gujarat link and the company’s in even better stead. Cadila Healthcare gained nearly 50 per cent, Alembic Pharma 51 per cent and Torrent Pharma a whopping 95 per cent.

A simple ‘Gujarat’ in the name works wonders, apparently. Gujarat State Petronet, which builds pipelines to supply natural gas across the State, rose 102 per cent as against a 47 per cent rise in the BSE 200 universe. Gujarat Gas rose 150 per cent, Gujarat State Fertilizer by 109 per cent, and Gujarat Fluorochemicals by 216 per cent against their BSE 500 benchmark, which gained 48 per cent year-on-year.

The reverse holds true as well. Gujarati companies not seen as being particularly Gujarati have performed in line with their general sectoral trends. Sun Pharma rose 41 per cent, compared to BSE Healthcare which went up by 46 per cent. Public sector Bank of Baroda rose 68 per cent (BSE Bankex up 83 per cent) and Axis Bank gained 142 per cent (with ICICI Bank up 65 per cent, YES Bank gaining 183 per cent).