This article discusses pre-budget stock picks from various brokerages for the Union Budget 2024 of India to be presented on July 23rd, 2024. The budget is expected to be positive for the equity market, with a focus on themes like infrastructure, railways, power, consumer durables, affordable housing, defence, healthcare, and job creation.
Key Sectors to Watch
Infrastructure
Infrastructure development remains a top priority for the government, with significant budget allocations expected to boost this sector. Investments in roadways, railways, and urban development projects are likely to continue, providing ample opportunities for companies involved in construction, engineering, and related services
- Brokerages like Anand Rathi expect the government to continue its push for capex (capital expenditure) in sectors like roads, power, urban development, and railways.
- Stocks to watch in this theme include L&T, KNR Construction, and PNC Infratech. These stocks have risen around 50% in the last year.
- Ultratech Cement is also recommended by many brokerages.
Railways
Significant investments are expected in railways as the government plans to expand and modernize railway infrastructure. Some of the stocks to watch out for in this sector are IRCTC, Container Corporation of India and Texmaco Rail Wagon.
- Significant investments are expected in railways as the government plans to expand and modernize railway infrastructure.
- Stocks to watch in this theme include IRCTC, Container Corporation of India, and Texmaco Rail Wagon (Tagar Wagons).
- Anand Rathi recommends RVNL (Rail Vikas Nigam Limited) but cautions that the stock is currently trading in an overbought zone.
- Prasidh Laddhar expects the budget to benefit other railway stocks like Siemens, ABB, Bharat Forge (BML), and Jupiter Wagons.
Affordable Housing
The government is expected to increase funding for affordable housing and the development of new satellite townships near metro cities. This is likely to benefit stocks like Gayatri Properties, BLF and Oberoi Realty.
- The government is expected to increase funding for affordable housing and the development of new satellite townships near metro cities.
- Stocks to watch in this theme include Godrej Properties, BLF Ltd, and Oberoi Realty.
Defence
- Brokerages like PHS Research recommend Bharat Electronics Limited (BEL) and Bharat Dynamics Limited (BDL) as key stocks to watch in the defence sector.
- The combined market capitalization of the top 10 defence stocks has zoomed by 1.76 lakh crore rupees in the last month.
- Other gainers include Mahindra Aerospace and GRSE (Garden Reach Shipbuilders & Engineers).
Other Sectors
- Agriculture: M&M, Escorts, and UPL are expected to benefit from higher MSP (minimum support price) on crops and the strengthening of PM Kisan Samman Nidhi (a government scheme for farmers).
- Financials: HDFC Bank, Kotak Mahindra Bank, SBI, PNB, Bank of India, LIC Housing Finance, Can Fin Homes, ICICI Bank, Axis Bank, and ICICI Lombard are expected to gain as the government expands credit programs for MSMEs (micro, small and medium enterprises).
- Job Creation: TCS, Infosys, and L&T are seen as potential beneficiaries as the government focuses on job creation.
- FMCG and Consumer Durables: HUL, ITC, Dabur, and Emami are expected to gain post-budget in hopes of increased consumption.
- Power: Stocks like Inox Wind, Power Grid, Servotech Power, and Suzlon Energy are recommended by brokerages.
Strategic Investment Tips
Diversification
Diversifying your investment portfolio across different sectors can help mitigate risks and enhance returns. Consider allocating investments in infrastructure, agriculture, and renewable energy stocks to balance your portfolio.
Long-Term Perspective
Fundamental analysis is most effective for long-term investors. Focus on companies with strong financial health, consistent earnings growth, and a competitive edge in their respective industries.
Stay Informed
Keeping abreast of budget announcements and policy changes is crucial. Regularly monitor news updates and expert analyses to make informed investment decisions.
Disclaimer
This blog post is for informational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.
