How Indian elections may affect the share market — Goldman Sachs bets on these top stocks.

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The Nifty 50 has rallied over 10% before election results in 4 of the past 7 elections since 1996, largely in banking and industrial stocks.

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Goldman Sachs has picked 7 large-cap stocks that have underperformed recently - HDFC Bank, Kotak Bank, Dabur, Godrej Consumer, Infosys, ICICI Bank, and Ultratech Cement.

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Increased government spending ahead of elections typically benefits infrastructure and cement companies like L&T and Ultratech.

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Consumption stocks like ITC, Dabur, Zomato, MakeMyTrip, PVR could benefit from rising rural spending and Cricket World Cup.

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Risks include high valuations, slowing FPI inflows in coming months, and global factors. Key state election results out by December 2022 before 2024 national elections.

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Banking stocks like HDFC and Kotak could benefit from rising credit demand and improving asset quality.

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Defensive stocks like Infosys, Dabur, Godrej Consumer preferred by Goldman given high market valuations currently.

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