The Union Budget 2022-23 was tabled by finance minister Nirmala Sitharaman on Wednesday. On the budget day, the benchmark indices rallied more than 1 per cent for the third consecutive session, backed by continued buying interest and short-covering. Among sectors, the metal index was the top gainer, rallying over 4 per cent. Despite strong momentum, some profit booking was seen in Auto and oil stocks. The overall Budget 2022 outcome was positive. The kind of focus put on infrastructure in this year’s budget was extremely positive. However, bond yields rose on concerns about a large borrowing program. Rising yields are negative for equity market sentiment and NBFCs in particular, as per Jefferies, whereas capital goods, cement, pipe companies are beneficiaries of the budget announcements.
Experts largely feel the government maintained its focus to get the economy back on track and speed up growth, extending the focus on existing schemes, as its intention continued to boost the ‘Make-in-India’ initiative by focusing on infrastructure, housing, power, railways, employment, agriculture, digitisation through new-age technologies, electric vehicles, etc.
The biggest beneficiaries would be the infrastructure segment, capital goods, real estate, railways, power, fintech, agriculture, defence, and banks, experts say.
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“The Union Budget has laid down a strong platform for capacity creation and productivity improvement for the economy. We believe that banks like ICICI Bank, SBI, HDFC Bank can witness strong lending growth coupled with margin expansion on the back of assets getting repriced faster than liabilities,” Kulkarni said.
“Another sector that should do well is capital goods since the government wants new capacities to come in, and thus the additional PLI schemes getting announced. Some of the stocks we recommend in the capital goods sector are Siemens, Voltamp Transformers, and Larsen & Toubro,” he explained.
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Larsen & Toubro: The Union Budget has raised its allocation for capital expenditure to Rs 7.5 lakh crore in 2022-23, up from Rs 5.5 lakh crore in 2021-22. The government believes the public investment will be necessary to support private investment that will, in turn, create demand. This will be positive for a company like Larsen & Toubro. Larsen & Toubro remains the best play on a capex cycle in India.
Ultratech Cement: The budget has allocated 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 the government’s thrust on Infrastructure development and recent improvement in housing demand.
DLF: The government announced a housing plan, including affordable housing, in urban and rural areas. These announcements are expected to help boost the affordable housing market. This is positive for DLF given its strong momentum in both sales bookings and deal additions.
Bharti Airtel: India will conduct the auction of airwaves to ensure telecom operators can launch a 5G network by 2023. Also, in a separate announcement, the Government also announced fund allocation to ensure the reach of faster broadband in rural areas. Bharti’s superior execution quality and consistent subscriber and revenue market share gain will benefit the company.
IRCTC: India will run 400 new, energy-efficient Vande Bharat trains in the next three years. The railway sector will also see 100 Gati Shakti Cargo terminals, which will be developed in the next three years. With an eye on farmers, the rail sector will also develop “One Station One Product”, which will leverage local produce carried on the railways. This is positive for IRCTC.
Can Fin Home: Can Fin has a strong presence in the small and affordable housing space, coupled with a healthy balance sheet, we expect it to be a big beneficiary.
Bharat Electronics (BEL): Government has announced 68 per cent of capital for the defence sector to be allocated to the domestic industry in 2022-23. It’s also set aside 25 per cent of its budget in defence research and development (R&D) for collaborating with the private industry. BEL is well-positioned to benefit from rising defense expenditure.
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While speaking about what stocks should one invest in after the Union Budget 2022, Singhal said: “India’s ambitions to promote clean transport technology, EV battery makers will gain from a new swapping policy for electric vehicles.”
Yash Gupta- equity research analyst, Angel One Ltd. suggests investing in these infra stocks
While talking about the stocks which could perform well given the sector-specific budget announcements, Gupta said: “The Union Budget has a focus on increased capital spending and this will be beneficial for Infrastructure and allied sectors. A sharp increase in capital expenditure by 24.5 per cent YoY to Rs 7.5 lakh Cr. in FY2023 on the back of 41.4 per cent YoY growth in FY2022. Positive for the Infrastructure sector. The addition in infrastructure projects will lead to an increase in the order books for the companies. The cement sector would be a key beneficiary. Positive for all cement companies such as UltraTech Cement, JK Cement, ACC, JK Lakshmi, etc.”
Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
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