Notwithstanding the fact that currently the equity indices are at record high levels, there is still scope for an upside in equities due to likely improvement in fundamentals, a host of global as well as domestic brokerage firms say.
Given that the BJP's majority will almost certainly lead to heightened hopes the on economic reform front, domestic brokerage firm Ambit Capital has raised the FY15 Sensex target to 30,000 from 24,000 earlier.
"We raise our FY15 Sensex target to 30,000 from our previous target of 24,000 which was published on 6 January 2014," Ambit Capital said.
Experts believe that over the past decade, a fragmented coalition with differing economic ideologies had been the key reason for the economic malaise, and since this verdict has given the Modi-led BJP a clear majority, it will pave way for a more business-friendly government.
Investors are betting on Modi-led BJP government seeing his track record in Gujarat. His political campaign was focused more on development, say experts.
The Sensex ended on Tuesday at a new closing peak of 24,376.88 while the Nifty ended at 7.275.50.
Deutsche Bank has raised its Sensex target to 28,000 for this year end, while UBS has set raised the Nifty target for end-2014 to 8,000.
"We see the confidence among domestic and foreign investors returning to India & expect India to remain a very promising destination," DBS Bank Head, Treasury and Markets Vijayan S said.
According to a Morgan Stanley research note, given the mood of the market an "overshoot" is possible. Morgan Stanley's Index target is 26,300 for June, 2015 compared to its previous target of 21,280.
"Given that Modi has won a strong mandate on a campaign focused around driving higher growth, markets will likely continue to believe that the policy outline will be positive. Our view is that it will be," UBS said in a research note.
"We remain bullish on Indian equities. It may be early to book profits," UBS said in a report.
In the recently concluded elections, the BJP-led NDA scored an overwhelming majority of 334 seats, in the 543 -member Lok Sabha.