West Bengal, Kerala, Assam, Tamil Nadu: MOFSL on state elections, market, stocks to buy

MOFSL in its latest strategy note said the FY27 will be marked by several politically-sensitive state elections such as West Bengal, Tamil Nadu, Kerala and Assam, with imminent verdict in early May. The brokerage said the BJP-led NDA is not a ruling coalition in West Bengal, Tamil Nadu and Kerala and their results will be keenly scrutinised for any progress made. 

"This will be capped by the critical elections in Uttar Pradesh in February-March 2027," it said.

The brokerage said India’s domestic politics in FY26, following an eventful FY25, was marked by surprise results in the Lok Sabha election verdict and then some comeback by NDA in state elections.

FY26, it said, was relatively much quieter with only Bihar state elections, wherein the NDA coalition posted a record victory reflecting policy continuity. 

Voting in West Bengal will take place on April 23 and April 29, with results on May 4. Kerala, Assam and Union Territory Puducherry will go to vote on April 9.Tamil Nadu assembly elections are scheduled for April 23, with results on May 4. 

On stock market, MOFSL said the duration of the ongoing Iran-Israel war remains the key overhang, but a resolution to the war will likely release pent-up positive sentiment and aid Indian markets to recoup the losses and underperformance of FY26.

After the recent market correction of 10 oer cent since the start of the US-Iran, valuations, it said, have become much sober, with the Nifty trading at 17.7 times, which is 15 per cent discount to LPA of 20.9 times. 

"Moreover, Indian market’s valuation premium, which has been a bone of contention for EM investors, has shrunk sharply to 27 per cent against a 10-year average of 73 per cent and a peak premium of 145 per cent and closer to a decadal-low premium of 21 per cent. 

"This relative valuation correction provides a strong entry point for Indian equities given that the structural case for India’s economy remains strong as ever," it said.

MOFSL’s top ideas among Nifty-50 names included Bharti Airtel, SBI, ICICI Bank, Lenskart, M&M, Titan, Bharat Electronics, Eternal, Tata Steel, Infosys and InterGlobe Aviation.

Among non-Nifty50 names, its preferred picks were TVS Motor, Groww, Indian Hotels, AU Small Finance Bank, Dixon Technologies, Premier Energies, Coforge, Radico Khaitan, Delhivery and ACME S0lar.

MOFSL said DIIs continued to be the bedrock of Indian markets as they invested $96 billion in FY26 on top of $72 billion in FY25, underlining the secular theme of rising retail participation in equities. Mutual funds received yet another quantum of record inflows into their equity schemes, with their AUM rising to Rs 39 lakh crore despite the mix of protectionism, kinetic war, volatility spikes and a long period of muted returns.

It noted that Indian markets sustained several bouts of sharp downdrafts in FY26 due to FII selling despite the DII bid staying strong. This was exacerbated by a rare phenomenon of sharp 8 per cent annual rupee depreciation, eventually culminating in India's multi-period sharp underperformance against emerging market (EM) peers.