Tuesday's meltdown seems to have become a distant memory, as bulls are loading up on stocks with renewed vigor. What explains the dramatic turnaround in sentiment? Short Call is getting mixed views from market participants.

Some of the narratives doing the rounds:

• 1- PM Modi will adapt and be able to manage the coalition after some initial hiccups
  

2- Allies need the BJP as badly as the BJP needs them

3- BJP will with break its allies or some other party, buy out a few

independents have a majority over the next 6-12 months

4- Earnings growth is independent of the government at the center

5- Strong domestic inflows will limit the downside

What the market is overlooking at this point:

The ability of the allies to drive too hard a bargain and frequently interrupt policy-making

Expensive valuations

Moderation in corporate earnings growth that could lead to a price-earnings multiples shrinking.

Pulse

'Despite the sharp rally over the last couple of days, most people are still fearful. That is a good sign to buy. Expectations have been reset to more realistic levels.' - Varun Saboo, Head Equities, Anand Rathi Shares

Page Industries (Rs 38,793, 0.6%)

The stock rose the fourth session in a row, and has gained over 8 percent this week so far

Bull argument: The company maintained margins in Q4 despite pricing pressure and a drop in volume sales. Management says things started improving towards the end of the March quarter, and the trend should be sustained.

Bear argument: Inventory correction in the channel is underway, and it may take a further 1-2 quarters for a meaningful pick up in volumes, says broker SMIFS.

ITC (Rs 436.40, 1.42%)

Shareholders have approved the demerger of the hotel business.

Bull argument: Consumption stocks are back in favor of the market. The stock has been consolidating for a while.

Bear argument: Leaf tobacco prices up 20 percent; further rise could hurt margins in FY25. Concerns of excise duty hike in the Union Budget could keep stock under pressure near term.

Heritage Foods (Rs 601, 10%)

Stock on a tear since the Telugu Desam Party’s strong performance in the Lok Sabha and assembly elections. TDP boss Chandrababu Naidu’s son and daughter-in-law are the promoters of the company.

Bull argument: The company plans to open 2,000 village-level collection centers every year. It entered Orissa in Q4 and plans to enter new markets in existing states.

Bear argument: Stock has risen sharply over the past few months and there has been build-up of speculative positions. Domestic institutional investors have been reducing exposure to the stock.

Uno Minda (Rs 974.20, 13.14%)

The company inked a deal with China's lnovance Automotive to boost the electric four-wheeler product portfolio.

Bull argument: The company has a strong track record in securing order wins for new products, says broking firm KIE. Growing electrification trend and the addition of newer EV products should aid medium-long-term growth, KIE says.

Bear argument: Capex plans of over Rs 2,900 crore may support long-term growth but pose a threat to near-term margins and could put pressure on profits.

United Spirits (Rs 1,308, 0.65%)

Shares have risen 10 percent in the past week after Q4 profit more than doubled to Rs 241 crore in the March-ended quarter.

Bull argument: The management has guided double-digit growth for the portfolio driven by premiumization. Renovations and innovations in category additions coupled with better growth in the Prestige & Above (P&A) portfolio to drive growth.

Bear argument: Margin headwinds may restrict the growth of the stock amid inflationary headwinds in key commodities. Lower consumption can also eat volume growth, thereby diminishing growth prospects for the stock.