An index created by FE of Gujarat-based companies includes 46 companies registered in the north-western state of India. The gauge has given positive returns of nearly 35% since September 13, 2013 when BJP announced its PM candidate, data compiled by Capitaline and Bloomberg showed.
Only the BSE Capital Goods index (+51% returns) and the BSE Small-cap Index (+37% returns) have performed better than the Gujarat index, data showed.
The returns of Gujarat-based index are even higher if one includes companies with corporate offices or have significant investments in the state. Some of the notable names include Reliance Industries, Tata Motors, Tata Chemicals, Tata Power, UltraTech Cement, Lupin, Bayer Crop Science, Apollo Tyres among 165 additional companies, data showed.
However, analysts say hope is driving the rally, and that the overall market sentiment may come to terms with reality a month later, when election results are announced. Some of the companies are debt-laden and a few are reporting losses. However, the markets, strategists say, are running ahead of fundamentals and appear to have priced in all uncertainties. India has been among the best performing markets in recent months, shrugging off concerns of slowing growth and high inflation.
Indian markets are pricing in a positive result. Opinion polls suggest a high chance of a stable NDA coalition government led by the BJP, as voters are frustrated with the performance in the past 10 years of the UPA . A stable and cohesive government would be an investor-friendly outcome, said Anubhuti Sahay, associate economist at Standard Chartered.