The EU budget 2022-23 was presented on Wednesday by Finance Minister Nirmala Sitharaman. On budget day, benchmark indices were up more than 1 percent for the third consecutive session, supported by continued buying interest and short coverage. Of the sectors, the metals index was the biggest winner, rising more than 4 percent. Despite the strong momentum, some gains were made in auto and oil stocks. The overall result of the 2022 budget was positive. The emphasis placed on infrastructure in this year’s budget has been extremely positive. However, bond yields rose on concerns about a major lending program. Rising yields are negative for sentiment in stock markets and NBFCs in particular, Jefferies said, while capital goods, cement and pipelines are the beneficiaries of the budget announcements.
Experts largely believe that the government has maintained its focus on getting the economy back on track and accelerating growth, and has expanded its focus on existing schemes as its intent to launch the ‘Make-in-India’ initiative continued to boost by focusing on infrastructure, housing, energy, railways, employment, agriculture, digitalization through new age technologies, electric vehicles, etc.
The largest beneficiaries would be the infrastructure segment, capital goods, real estate, railways, energy, fintech, agriculture, defense and banks, experts say.
Here are a few stock recommendations by Naveen Kulkarni, chief investment officer, Axis Securities
“The Union budget has established a strong platform for capacity creation and productivity improvement for the economy. We believe that banks such as ICICI Bank, SBI and HDFC Bank could see strong lending growth coupled with margin expansion as assets reprice faster than liabilities,” Kulkarni said.
“Another sector that should be doing well is capital goods, as the government wants new capacity to come in, so the additional PLI arrangements are announced. Some of the stocks we recommend in the capital goods sector are Siemens, Voltamp Transformers and Larsen & Toubro,” he explains.
Siddhartha Khemka, Head of Retail Research, Motilal Oswal Financial Services recommends these stocks
Larsen & Toubro: The Union budget has increased the capital expenditure allocation to Rs 7.5 lakh crore in 2022-23, from Rs 5.5 lakh crore in 2021-22. The government believes that public investment will be needed to support private investment which in turn will create demand. This will be positive for a company like Larsen & Toubro. Larsen & Toubro remains the best piece on a capex cycle in India.
Ultratech cement: The budget has earmarked 480 billion for a housing plan, including affordable housing, in urban and rural areas. Ultratech Cement (UTCEM) is in a strong position to gain market share, led by its strong distribution network, given government pressure on infrastructure development and the recent improvement in housing demand.
DLF: The government has announced a housing plan, including affordable housing, in urban and rural areas. These announcements are expected to boost the affordable housing market. This is positive for DLF given the strong momentum in both sales bookings and deal additions.
Bharti Airtel: India will hold the air auction to ensure telecom operators can launch a 5G network by 2023. Also, in a separate announcement, the government announced funds to ensure the reach of faster broadband in rural areas. Bharti’s superior quality of execution and consistent increase in subscribers and revenue will benefit the company.
IRCTC: India will operate 400 new, energy-efficient Vande Bharat trains over the next three years. The rail sector will also get 100 Gati Shakti Cargo terminals, which will be developed over the next three years. With farmers in mind, the rail sector will also develop “One Station One Product”, which will use local products transported by rail. This is positive for IRCTC.
Can Fin Home: Can Fin has a strong presence in the small and affordable housing, coupled with a healthy balance sheet, we expect it to be a big beneficiary.
Bharat Electronics (BEL): The government has announced that 68 percent of the capital for the defense sector will be allocated to domestic industry in 2022-23. It has also earmarked 25 percent of its budget for defense research and development (R&D) for collaboration with the private sector. BEL is well positioned to benefit from rising defense spending.
Ravi Singhal, Vice-Chairman, GCL Securities on Post-Budget Equity Recommendations
Speaking about which stocks to invest in after the EU’s 2022 budget, Singhal said: “India’s ambitions to promote clean transportation technology will help EV battery manufacturers benefit from a new electric vehicle swap policy.”
Yash Gupta stock research analyst, Angel One Ltd. proposes to invest in these infra shares
Speaking about the stocks that could perform well given the sector-specific fiscal announcements, Gupta said: “The Union budget is focused on higher capital expenditures and this will benefit infrastructure and related sectors. A sharp increase in capital expenditure at 24.5 percent year-on-year to Rs 7.5 lakh Cr. in FY2023, thanks to a 41.4 percent year-over-year growth in FY2022. Positive for the Infrastructure sector. The addition in infrastructure projects will lead to an increase in the order books of the companies. The cement sector would be a major beneficiary. Positive for all cement companies such as UltraTech Cement, JK Cement, ACC, JK Lakshmi, etc.”
Disclaimer: The expert opinions and investment tips in this News18.com report are their own and not the website’s or its management. Users are advised to contact certified experts before making any investment decisions.
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