Three sectors – railways, defence, infrastructure – and PSUs as a set of stocks. The outcome of the general election was important to all of these from a valuation perspective. It was to signal policy continuity – a major tailwind – and stocks here had already seen strong re-rating. But because the results were not exactly what the street was expecting – an outright majority for the ruling party – these stocks underperformed for some time after June. Will the street have more confidence in them now, after the favorable Maharashtra election result? Of the three sectors, infrastructure is where both state and central government expenditure is seen. Will companies in this sector see a revival as government spending makes a comeback?
