Budget 2024: These stocks and sectors likely to gain from announcements

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Finance Minister Nirmala Sitharaman is all set to present the Union Budget 2024 on July 2023 and the government is expected to balance fiscal deficit management, capital expenditure for growth, and social spending, according to brokerage firms like JM Financial.

The anticipated continuation of the current capex agenda, increased budgetary allocation for the rural economy, and a roadmap for ‘Viksit Bharat’ by 2047 are key themes for this highly awaited event.

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Therefore, investors are closely watching for any potential changes to the capital gains tax on equities.

If there are no adverse changes, it would be seen as a positive signal for the equity market, believe analysts.

Read Full Budget 2024 Coverage

JM Financial has also highlighted several stocks that are expected to be in focus ahead of the Budget.

These include Mahindra & Mahindra Ltd, Hero MotoCorp Ltd, ITC Ltd, Sumitomo Chemical India Ltd, Reliance Industries Ltd, Power Grid, and NTPC Ltd.

Other notable stocks on JM Financial’s Budget list include Sanghvi Movers Ltd, Bharat Electronics Ltd, Bharat Forge, VA Tech Wabag Ltd, Larsen & Toubro Ltd, DLF Ltd, Ambuja Cements Ltd, APL Apollo, PFC, and IRCON International Ltd.

FMCG sector

Any potential tax cuts, expansion in tax slabs, or an increase in the limit for tax-saving investments under Section 80C would likely boost disposable income, benefiting FMCG firms such as Dabur India, Hindustan Unilever (HUL), Godrej Consumer, and Nestle India.

On the other hand, an increase in excise duty or National Calamity Contingent Duty (NCCD) on cigarettes and tobacco products would negatively impact cigarette manufacturers like ITC and Godfrey Phillips.

Renewable energy and utility space

In the utilities sector, there are expectations for enhanced incentives for renewable energy, aligned with the 500 GW target by 2030.

Potential measures could include higher viability gap funding for battery storage, offshore wind plants, and solar energy, which would be positive for companies like NTPC, Tata Power Company Ltd, JSW Energy, Adani Power, and CESC. Power ancillary firms such as Suzlon Energy, Inox Wind, and Sterling & Wilson would also benefit from such announcements.

Additionally, any steps towards rooftop solarisation would favor Tata Power, Borosil Renewable, and Waaree Renewables. Enhanced focus on transmission and distribution (T&D) capex should benefit Power Grid.

Defence, railways, and infrastructure

Increased allocation for defence capital expenditure would positively impact players like Bharat Electronics (BEL) and Hindustan Aeronautics (HAL).

Higher capital spending on railway infrastructure would benefit companies such as RVNL, Titagarh Rail Systems, IRCON, and BEML.

Any rise in infrastructure capital outlay would be advantageous for KNR Constructions, PNC Infratech, RITES, and Ahluwalia Contracts.

Water projects and housing

Dedicated larger allocations to significant water projects like Jal Jeevan Mission, Nal Se Jal, and Inland Waterways Development could favor NCC, VA Tech Wabag, Finolex Industries, Ratnamani Metals, and Welspun Corp.

Additionally, there are hopes for an increased budget allocation to the PMAY scheme, aimed at building 20 million rural houses over the next five years, on top of the Cabinet’s recent decision to construct 30 million homes for the urban and rural poor.

Beneficiaries of this scheme could include UltraTech Cement, Ambuja Cements, and Dalmia Bharat. A separate tax deduction limit for life insurance could benefit LIC.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)

Published By:

Koustav Das

Published On:

Jul 16, 2024

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