Maha election results fire up PSU stocks

Analysts believe NDA's landslide victory in the state will bring zing back to the markets that have seen some correction recently

- DEEPAK KORGAONKAR

Shares of public-sector undertakings (PSUs), including banks, rallied by up to 9 percent on the BSE on Monday on expectation that the central government would now focus on spending after the ruling National Democratic Alliance's (NDA's) emphatic victory in Maharashtra.

Rites, Ircon International, Indian Bank, Bharat Dynamics (BDL), Central Bank of India, NBCC (India), Uco Bank, Housing & Urban Development Corporation (Hudco), Oil and Natural Gas Corporation (ONGC), SJVN, Cochin Shipyard, and Bank of Baroda rallied between 5 percent and 9 percent on the BSE.

The BSE PSU index ended 3 percent higher at 19,752.63, as compared to the 1.25 percent rise in the BSE Sensex. The PSU index had hit a record high of 23,019 on August 1.

With elections now behind and the BJP getting a strong boost from Haryana and Maharashtra elections, brokerage firm Motilal Oswal Financial Services (MOFSL) expects the government to now focus on spending (H1FY25 government spending is flat year-on-year (Y-o-Y) and is down 17 percent for capex spending).