"Markets have not priced in a positive election outcome yet. Investors indicate that markets are hoping for a Modi-led government. Nifty at 6,900 will be a possibility if markets start believing in a positive election outcome, based on 15 times the PE and 15% earnings growth in FY15," UBS said in report.
A more euphoric sentiment among investors could imply higher multiples. Current valuations for Nifty at 14 times of one year forward PE imply that a positive election outcome may not yet be priced in, it said.
"Investors suggest that opinion polls have aided expectations around increased probability of a Modi government," UBS said.