2024 Annul-Union Budget of India
An analysis of Sensex's 10-year performance on Budget days throws out an average gain of 0.27% with the worst D-Day being the 2020 Budget when the index fell 2.43%. The best Budget day performance was in 2021 when Sensex ended with a handsome gain of 5%.
On an average, the post-Budget month has delivered a return of around 5.7% with sectors like materials, energy, staples, and industrial leading the way.
This time, the overarching theme of the Budget is predicted to be - more of the same.
"The big focus would be on more of the same since the ministers are the same, since the policies at least as expressed in recent interviews by everybody are a continuation of the past,"
Here are stocks and sectors that could be in focus when Nirmala Sitharaman presents the Budget:
Defence stocks
Defense indigenisation thrust should continue and there could be an increase in allocation compared to the interim Budget to meet strategic requirements and fulfill modernization needs .
"We expect higher allocations for aircraft, engines, and vehicles. The Ministry of Defence will also continue its thrust on exports, having announced a Rs 50,000 crore defence export target by FY29 vs Rs 21,100 crore in FY24,"
Sharekhan has listed HAL, BEL and Bharat Forge as its Budget picks while Prabhudas expects sustained defence focus will continue to keep the excitement in stocks like HAL, BEML, BEL, MDL, BDL, GRSE, Data Pattern, Cochin Shipyard and other private sector defence plays.
Choice Broking has picked BEL, BDL and HAL as preferred Budget picks.
Rail stocks
Expecting allocation for railways in the final Budget to increase further with a focus on modernisation, safety as well as expediting of the dedicated freight corridors. Robust capex outlay momentum to continue with 15-20% YoY growth as the focus shifts to rolling stock, safety, new tracks laying, etc over the coming years.
"Even if Railways capex allocation remains stagnant, we still see higher allocation towards private sector vs self capex ordering done earlier," .
Huge capex plans of Railways, Nuvama said, may benefit companies like Ircon, RVNL, Siemens, Timken India, HBL Power, ABB, BEML, BHEL, Jupiter and Titagarh Wagons.
Nomura believes that the focus on public capex will remain a key tenet of the government’s economic strategy. "Consequently, we expect the government to dial-up its total capex outlay to 3.5% of GDP, from the 3.4% of GDP presented in the interim Budget. Given states’ demands, the government could raise the unconditional amount transferred under the 50-year interest free loan for infrastructure spending," it said.
Stocks in focus - UltraTech, L&T, PNC Infratech.
Power stocks
Renewable energy will remain a key theme in the budget, with continued capacity additions across solar, wind, hydro, nuclear, etc. to meet the target of 500GW RE capacity by 2030. The government recently approved viability gap funding of Rs 7,500 crore for 1GW of offshore wind energy capacity,.
Power stocks to track: NTPC, Power Grid, Coal India, Tata Power, CESC
Chetna Parmar
Source:-Media
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