India posted strong outperformance in March as foreign investors invested over USD 5 bn into Indian equities, the largest monthly buying since early 2017, resulting in the rupee strengthening 2%. Expectations for a potentially stable government changed it all after January and February which was a pre-election jitter period for investors.  Small and mid-cap stocks outperformed large-cap stocks, a change from recent trends where large caps have significantly outperformed.

In early March, the Indian election schedule was announced. Let us do a quick recap as this only happens every five years.
The enormous size of Indian elections, where about 900 million people make it to the polls, has to be staged in seven phases with the first voting beginning in certain states on 11th April until it all completes on 19th May. Votes will be counted on 23rd May, and on the same day, the results will be declared.

It is expected that 48% of the voters are female, that 45 million first time voters will make it to the polls and will cast their votes that will determine how to split the 543 seats in parliament. There are two large national parties whereas the rest are regional parties, strong in their respective states.

Whatever the outcome, India is looking strong and well positioned for the future as the Indian economy is on a 7%+ GDP growth trajectory, with a savings rate of over 30%.
The stock market has a fair price/earnings of 16x FY 2020 and corporate India has merged from the tough earnings cycle last five years post demonetization, bank cleanup, expect corporate profits to start to shoot up now.  Let us remind ourselves of India being the 6th largest global economy and expected to be the 3rd largest contributor to global growth in the next few years and 68% of the population is born after 1980

Source: Unifi, Bloomberg